India Corporate Bonds
Yields rise on profit booking after falling intraday
This story was originally published at 20:04 IST on 7 May 2026
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By Nandini Sinha
MUMBAI – Yields on corporate bonds ended up Thursday after falling intraday on profit booking even as volumes fell sharply, dealers said. The rally seen Wednesday was unusual, and hence the rates pulled back Thursday, dealers said.
The National Bank for Agriculture and Rural Development's three-year bonds ended Thursday at 7.45-7.55%, up from 7.45-7.48% Wednesday while the five-year NABARD bonds were up 5 basis points at 7.60-7.65% from 7.55-7.60% Wednesday. The indicative yields on 10-year NABARD bonds were 7.65-7.75%, up from 7.60-7.65% Wednesday.
"Investors are exiting short-term papers and entering long-term bonds as in 2028, 2029 segments," a dealer at a large state-owned bank said. "Positive momentum continued in the 2028-2029 segment. US (treasury) yields also eased," a dealer at a private sector bank said. At 1741 IST, the benchmark 10-year US Treasury yield was 4.36%, down 8 basis points from the previous close of 4.44%.
Market participants remain cautious of the rates on corporate bonds after the sharp fall seen Wednesday. This is due to the uncertainty over the ceasefire between the US and Iran. "It depends...if there is no breakthrough or if there's any negative news (about US-Iran war), it (yields) could rebound and reach levels higher than before," the dealer said. "This is because the base (of the yields) is inching up higher with every move."
The market is bracing for the medium term even if the war ends. "Even if the war stops, crude oil (prices) are not going to fall (as much) because the supply will remain disrupted for three to six months," the dealer said.
At 1500 IST, deals aggregating INR 49.41 billion were recorded in the secondary market on the National Stock Exchange and BSE combined Thursday, down sharply from INR 68.68 billion Wednesday. Among the actively traded bonds Thursday, INR 10.04 billion worth of Tata Capital Housing Finance Ltd.'s bonds were traded and INR 5.26 billion of NABARD's papers were traded. Papers issued by the State Bank of India, REC Ltd., and Indiabulls Housing Finance Ltd. were also actively traded.
Poonawalla Fincorp Ltd. plans to raise up to INR 10 billion through bonds issue Friday, dealers said. Ambium Finserve Ltd. plans to raise INR 200 million while IIFL Samasta Finance Ltd. plans to raise INR 350 million Friday in the primary market.
Dealers expect market activity to remain subdued in the near term due to uncertainty over the ceasefire between the US and Iran. "With Trump in seat, we never know, he may tweet something around the resolution...it may have a positive effect on markets. But if Iran does not agree, he may put out something to continue bombing Iran...so market is very uncertain," a dealer at a public sector bank said.
UDAY BONDS
No Ujwal DISCOM Assurance Yojana bond was traded Thursday, according to data on the RBI's Negotiated Dealing System-Order Matching system.
BENCHMARK LEVELS FOR CORPORATE BONDS:
Tenure | Thursday | Wednesday |
Three-year | 7.45-7.55% | 7.45-7.48% |
Five-year | 7.60-7.65% | 7.55-7.60% |
10-year | 7.65-7.75% | 7.60-7.65% |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
With inputs from J. Navya Sruthi and Vaishali Tyagi
Edited by Pankaj Aher
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