India Corporate Bonds
Yields steady; trade volume muted at start of FY27
This story was originally published at 21:11 IST on 6 April 2026
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By Nandini Sinha, J. Navya Sruthi, and Meera Nair
MUMBAI – Corporate bond yields ended broadly steady on Monday after moving in a narrow range during the day as trading remained muted at the start of the financial year 2026-27 (Apr-Mar), dealers said. Bonds maturing in up to five years were traded the most, they said.
Improved liquidity in the banking system boosted market activity, dealers said. The net liquidity absorbed by the Reserve Bank of India, a proxy for liquidity surplus in the system, was INR 3.68 trillion on Sunday, lower than INR 3.72 trillion Saturday but up from INR 3.48 trillion Friday. "Systemic liquidity is expected to remain positive till the first half of May which is expected to support (corporate) bond market," a dealer at a brokerage firm said.
Indicative yields on three-year bonds of the National Bank for Agriculture and Rural Development rose marginally to 7.69-7.71% from 7.67-7.70% Thursday. The yields on five-year NABARD bonds were 7.70-7.73%, down from 7.73-7.75% Thursday, while those on 10-year NABARD bonds rose to 7.79-7.82% from 7.77-7.80%.
"Volumes were high during the day because only the big players like NABARD and SIDBI (Small Industries Development Bank of India) traded in the market and that too hardly four players were there," a dealer with a state-owned bank said.
At 1500 IST, deals aggregating INR 57.26 billion were recorded in the secondary market on the National Stock Exchange and BSE combined, up from INR 50 billion Thursday. Financial markets were closed on Friday for Good Friday.
Papers issued by Bajaj Housing Finance Ltd., IIFL Home Finance Ltd., Indel Money Ltd., National Highways Authority of India, Telangana State Industrial Infrastructure Corp. Ltd., NABARD, and Kerala Infrastructure Investment Fund Board were traded the most.
In the primary market, bond issuances rose to INR 1 billion from INR 750 million Thursday. Ambium Finserve Ltd. plans to raise up to INR 200 million Tuesday through bonds maturing on Nov. 26, 2027. Moneyboxx Finance Ltd. plans to raise INR 200 million Tuesday through two-year bonds maturing on Apr. 8, 2028.
Dealers do not expect many new issuances in the Apr-Jun quarter as banks need board approval, a dealer at a state-owned bank said. Most companies and non-banking financial companies currently prefer bank loans and if the complete requirement is not met, then they may raise funds through short-term debt market instruments, dealers said.
Market participants are waiting for the decision of the Reserve Bank of India's Monetary Policy Committee Wednesday. They expect the RBI's rate-setting panel to maintain status quo. Traders will also keep an eye on developments in the West Asia war.
"With market participants adopting a wait-and-watch approach as they track the RBI's MPC decision, any new bond issues will depend on the natural demand for funds by companies, the June quarter earnings as well as on the war in West Asia," a dealer at a private sector bank said. "Both systemic liquidity and the risk appetite of investors influence trading in the corporate bond market."
UDAY BONDS
In the secondary market, one Ujwal DISCOM Assurance Yojana bond worth INR 2.90 million was traded Monday, according to data on the RBI's Negotiated Dealing System-Order Matching system.
* INR 2.90 million of Chhattisgarh's 8.46%, 2029 bond was dealt at 8.3001%
BENCHMARK LEVELS FOR CORPORATE BONDS:
Tenure | Monday | Thursday |
Three-year | 7.69-7.71% | 7.67-7.70% |
Five-year | 7.70-7.73% | 7.73-7.75% |
10-year | 7.79-7.82% | 7.77-7.80% |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Ashish Shirke
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