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Informist, Tuesday, Apr. 21, 2026

By Nandini Sinha

MUMBAI – Yields on the corporate bonds in the secondary market were unchanged Tuesday as ample liquidity in the banking system has offset the selling pressure, dealers said. Traders are now expecting more public-sector companies to tap the market after the National Bank for Agriculture and Rural Development raised INR 42.50 billion Tuesday through the reissue of the bond maturing on Jul. 17, 2029.
 

"It is highly possible that NaBFID (National Bank for Financing Infrastructure and Development), SIDBI (Small Industries Development Bank of India), and other PSUs (public sector undertakings) may tap the market after today's NABARD primary issuance," a dealer at a private sector bank said. NABARD set a cut-off of INR 99.88, or 7.4892%, on the 7.44%, July 2029 bond reissue, dealers said. The market had expected the cut-off to be around 7.50% for the full amount on the bond reissue. Dealers were expecting the base size subscription to be around 7.46%. Private banks, mutual funds, and a few insurance companies were major participants at the auction.  

Meanwhile, in the secondary market, yields on three-year bonds of NABARD were steady from the previous day at 7.33-7.38% Tuesday, dealers said. Yields on five-year bonds of NABARD were steady at 7.50-7.55%. The yields on 10-year NABARD bonds were broadly unchanged at 7.62-7.67% Tuesday.

Banks and mutual funds remained the most active participants in the corporate bonds market Tuesday, dealers said. Bonds issued by non-banking finance companies with maturities of up to two years were traded the most. Mutual funds were seen selling and buying corporate bonds as they were churning their portfolios, a dealer from a public sector bank said. 

A few dealers also said mutual funds sold corporate bonds and had participated in the state government bond auction due to attractive and secured returns on these bonds. The Reserve Bank of India has set a cut-off yield at 7.64% on Rajasthan's 10-year bond Tuesday, which is on a par with the yield on the 10-year NABARD bond in the secondary market.  

However, comfortable liquidity in the banking system has restricted any rise of yields on corporate bonds. Although the net liquidity absorbed by the RBI, a proxy of surplus liquidity in the banking system, was INR 4.07 trillion Monday, down from INR 4.28 trillion Sunday due to outflows for goods and services tax payments, liquidity is still at a comfortable level, according to market participants. Despite outflows for GST payments, dealers see liquidity levels in the banking system at a comfortable level of INR 2 trillion to INR 3 trillion in the coming days. 

Traders see yields on corporate bonds at similar levels in the coming days as they track the negotiations between the US and Iran. US Vice President JD Vance was headed to Islamabad to join the second round of peace talks, according to media reports. However, Iran did not confirm whether it is sending a delegation for the talks.

"Little fluctuations in rates are normal due to the geopolitical situation (in West Asia). Brent crude (oil price) was at $94 today (Tuesday). So rates are going to be at similar levels unless there is a major geopolitical development," the dealer from the state-owned bank said.

Deals aggregating INR 119.55 billion were recorded in the secondary market on the National Stock Exchange and BSE combined Tuesday, significantly up from INR 77.26 billion Monday.
 

Papers issued by Edelweiss Housing Finance Ltd., Navi Finserv Ltd., IIFL Finance Ltd., Spandana Sphoorty Financial Ltd., Adani Enterprises Ltd., Best Capital Services Ltd, Kerala Infrastructure Investment Fund Board, and Andhra Pradesh State Beverages Corp. Ltd. were traded the most. In the primary market, bond issuances rose to INR 76 billion Tuesday from INR 28.05 billion Monday.

UDAY BONDS

In the secondary market, two Ujwal DISCOM Assurance Yojana bonds worth INR 4.90 million were traded Tuesday, 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 7.7739%
* INR 2 million of Tamil Nadu's 8.04%, 2029 bond was dealt at 7.2172%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

With inputs from J. Navya Sruthi

Edited by Deepshikha Bhardwaj

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