India Corporate Bonds
Yields end mixed ahead of RBI's MPC decision Wed
This story was originally published at 21:37 IST on 7 April 2026
Register to read our real-time news.Informist, Tuesday, Apr. 7, 2026
By Meera Nair
MUMBAI – Yields on corporate bonds ended mixed Tuesday, a day ahead of the Reserve Bank of India's Monetary Policy Committee's meeting decision, dealers said. Activity was concentrated in up to five-year maturity segment, they said. "People were on backfoot majorly today (Tuesday) as they await clarity from MPC before making any decision...most traders took position based on their requirement which lead to mixed movement in yields," a dealer at a brokerage firm said.
Market activity was subdued as it is the start of the new financial year 2026-27 (Apr-Mar), with issuances expected only in case of a funding crunch. There is comfortable liquidity in the banking system, so there is not much fundraising happening these days, dealers said. The net liquidity absorbed by the RBI, a proxy for liquidity surplus, was at INR 3.95 trillion Monday, the highest since Aug. 5 and up from INR 3.68 trillion Sunday.
Indicative yields on three-year bonds of the National Bank for Agriculture and Rural Development were broadly unchanged at 7.68-7.70% from 7.69-7.71% Monday. The yields on five-year NABARD bonds were at 7.75-7.80%, up from 7.70-7.73% Monday, while those on 10-year NABARD bonds were at 7.70-7.75%, down from 7.79-7.82%.
Corporate bond yields in 10-year segment tracked movement in government bond yields. Most government bond yields ended lower as dealers now anticipate the Monetary Policy Committee to hold the repo rate steady at 5.25% and to adopt a neutral tone in its commentary. An intraday fall in US Treasury yields and a brief decline in Brent crude oil prices also pushed yields lower.
Tuesday, overall deals aggregating INR 170.19 billion were recorded in the secondary market on the National Stock Exchange and BSE combined, higher from INR 140.90 billion Monday. Most mutual funds were buying and selling bonds having maturities up to five years. There was little activity in 10-year segment. Banks and insurance companies stayed away from secondary market of corporate bonds. Pension funds and corporates were also absent from the corporate debt market.
Papers issued by Kerala Infrastructure Investment Fund Board, Telangana State Industrial Infrastructure Corp., Andhra Pradesh State Beverages Corp., National Bank For Agriculture And Rural Development, Small Industries Development Bank of India, Housing & Urban Development Corp. and Bajaj Housing Finance were traded the most.
In the primary market, bond issuances fell to INR 400 million from INR 1 billion Monday. On Wednesday, SMFG India Credit plans to raise up to INR 7 billion through five-year bonds maturing on Apr. 9, 2031. Dealers expect primary market activity to remain dull in near term. "In the first month of the new financial year activity is usually less in the primary market," a dealer from state-owned bank said. "Activity is also low as it takes time to get permission (board approvals) to issue bonds." Further, market participants said issuers refrained from issuing bonds as borrowing cost was also on the higher side.
UDAY BONDS
In the secondary market, two Ujwal DISCOM Assurance Yojana bonds worth INR 101.00 million were traded Tuesday, according to data on the RBI's Negotiated Dealing System-Order Matching system.
* INR 100.00 million of Uttar Pradesh's 8.44%, 2029 bond was dealt at 7.2464%
* INR 1.00 million of Punjab's 8.47%, 2029 bond was dealt at 7.3179%
BENCHMARK LEVELS FOR CORPORATE BONDS:
Tenure | Tuesday | Monday |
Three-year | 7.68-7.72% | 7.69-7.71% |
Five-year | 7.75-7.80% | 7.70-7.73% |
10-year | 7.70-7.75% | 7.79-7.82% |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Deepshikha Bhardwaj
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