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Informist, Friday, May 22, 2026

By Nandini Sinha

MUMBAI – Yields on corporate bonds ended lower Friday, tracking the Indian government bond yields as optimism grew on the likelihood of a peace deal between the US and Iran, dealers said. Purchases of corporate bonds by companies in the three- and five-year segments also pulled down the yields. Mutual funds were the major sellers of corporate bonds, especially in the two- and three-year segments.

The Reserve Bank of India's announcement of an INR-2.87-trillion surplus to the central government did not have much impact on corporate bond yields during the last trading hours. "Rates (on corporate bonds) were down today (Friday)...no trades happened after the dividend announcement," a dealer at a brokerage firm said. However, market participants expect the yields on corporate bonds to open higher Monday as the benchmark 10-year Indian government bond yield rose towards the end of trading hours Friday.

The yield on the benchmark 10-year 6.48%, 2035 Indian government bond settled at 7.09%, up nearly 3 bps from the day's low of 7.06%. The yields on the three-year bonds of the National Bank for Agriculture and Rural Development were down 6 basis points at 7.94-7.99% from 8.0-8.05% Thursday, while yields on NABARD's five-year bonds were 7.95-8.01% against offers of 8.05% Thursday. The indicative yield on the 10-year NABARD bonds was 7.85-7.88%, down 17 bps from 8.01-8.05% Thursday. 

Bonds worth INR 2.05 billion were issued Friday, down from INR 7 billion of papers issued Thursday. In the secondary market, deals aggregating INR 53.60 billion were recorded on the National Stock Exchange and BSE combined at 1500 IST, down from INR 61 billion at the same time Thursday.

Among the actively traded bonds, INR 6.51 billion of NABARD bonds were traded and INR-5.25-billion worth of Power Finance Corp. Ltd. papers were traded. Papers issued by Bajaj Finance Ltd., LIC Housing Finance Ltd., Cholamandalam Investment and Finance Co. Ltd. were also actively traded. 

On Monday, Muthoot Finance Ltd. will seek bids to raise up to INR 50 billion through floating-rate bonds maturing in July 2029. Cholamandalam Investment and Finance Co. Ltd. will tap the market to raise INR 50 billion through floating-rate bonds maturing in February 2029. These are the first two companies with "AA+" rating to issue floating rate bonds in 2026-27 (Apr-Mar).

Axis Finance Ltd. will seek bids to raise up to INR 4 billion through the reissue of April 2029 bonds. Incred Financial Services Ltd. and Ugro Capital Ltd. plan to raise up to INR 2 billion each. 

State-run NHPC Ltd. plans to raise up to INR 20 billion Tuesday by issuing 15-year bonds with a separately transferable redeemable principal part structure, or STRPP, dealers said. "It's a long-term bond. Mostly EPFO (Employees' Provident Fund Organisation) will buy it," the dealer at the broking firm said. 

A total of INR 100.37 billion worth of deals in corporate bonds were recorded on the National Stock Exchange and BSE combined, sharply down from INR 120.68 billion Thursday.

UDAY BONDS

In the secondary market, two Ujwal DISCOM Assurance Yojana bond worth INR 2.5 million were traded Friday, according to data on the RBI's Negotiated Dealing System-Order Matching System.

* INR 2 million of Uttar Pradesh's 8.75%, 2030 bond was dealt at 7.4461%

* INR 500,000 of Uttar Pradesh's 8.77%, 2031 bond was dealt at 7.6446%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Akul Nishant Akhoury

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