India Corporate Bonds
Yields fall tracking gilts, surplus liquidity
This story was originally published at 20:29 IST on 15 April 2026
Register to read our real-time news.Informist, Wednesday, Apr. 15, 2026
By Nandini Sinha and Meera Nair
MUMBAI – Yields on corporate bonds ended lower Wednesday, tracking the fall in yields on government bonds, dealers said. Bonds maturing in up to five years were traded the most. Long-term bonds were not traded as much.
Prices of government bonds rose Wednesday after reports said the US and Iran have agreed in principle to extend the two-week ceasefire that was due to end Apr. 22. The yield on the 10-year benchmark 6.48%, 2035 bond ended at 6.8662%, against 6.9395% Monday.
Indicative yields on three-year bonds of National Bank for Agriculture and Rural Development fell to 7.35-7.38% from 7.40-7.45% Monday while those on five-year bonds of NABARD fell 10 basis points to 7.45-7.50%. Yields on 10-year NABARD bonds were 7.55-7.60%, against 7.65-7.70% Monday.
Mutual funds and banks bought corporate bonds in the secondary market. They also sold corporate bonds along with insurance companies and pension funds, a dealer at a state-owned bank said.
Deals aggregating to INR 171.68 billion were recorded in the secondary market on the National Stock Exchange and BSE combined, up from INR 105.49 billion on the previous trading day. "Volumes have gone up because (mutual) funds were on the buying side. In the new (financial) year... they are building their portfolio, so volumes will get better in the near future," the dealer from the state-owned bank said.
Paper issued by Power Finance Corp. Ltd., Housing and Urban Development Corp. Ltd., Muthoot Fincorp. Ltd., NABARD, Bajaj Housing Finance Ltd., HDFC Bank Ltd., and Hyderabad Metropolitan Development Authority were traded the most.
Market participants did not place aggressive bids because of ample liquidity in the banking system, dealers said. The maturity on Friday of the 6.99%, 2026 gilt with principal outstanding of INR 347.91 billion will also result in an increase in liquidity in the banking system. Dealers expect a rollover of the seven-day variable rate reverse repo auction by the Reserve Bank of India due to ample liquidity. "But this time it could be a higher amount than (INR) 2 trillion. It could be (INR) 3 trillion," a dealer at a private-sector bank said. The net liquidity in the banking system was INR 5.13 trillion Tuesday, down from INR 5.24 trillion Monday.
The Employees' Provident Fund Organisation is working on an exit strategy to reduce its exposure to stressed corporate debt, Business Standard reported, quoting sources. "The corporate bond market could harden if EPFO begins to sell (the stressed securities)," the dealer from the private-sector bank said. He expects a rise of 5-10 bps in short-term corporate bonds.
UDAY BONDS
No Ujwal DISCOM Assurance Yojana bond was traded Wednesday, according to data on the RBI's Negotiated Dealing System-Order Matching system.
BENCHMARK LEVELS FOR CORPORATE BONDS:
Tenure | Monday | Friday |
Three-year | 7.35-7.38% | 7.40-7.45% |
Five-year | 7.45-7.50% | 7.55-7.60% |
10-year | 7.55-7.60% | 7.65-7.70% |
End
Edited by Rajeev Pai
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