India Corporate Bonds
Ylds fall tracking gilts; NHPC bid gets good response
This story was originally published at 19:45 IST on 26 May 2026
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By Nandini Sinha
MUMBAI – Yields on corporate bonds ended lower Tuesday, after remaining steady throughout the day, tracking a fall in the Indian government bond yields, dealers said. Non-banking financial companies, the most active participants in the secondary market, actively bought papers in the 2027 and 2028 segment.
The yield on 10-year benchmark 6.48%, 2035 Indian government bond settled at 6.9943% Tuesday, ending below 7% for the first time in over two weeks. The yield on the National Bank for Agriculture and Rural Development's three-year bonds were at 7.88-7.93%, down 2 basis points from 7.86-7.95% Monday, while yields on NABARD's five-year bonds were 7.88-7.90%, down 2-6 bps from 7.90-7.96% Monday. The indicative yield on the 10-year NABARD bonds was 7.80-7.85% against 7.79-7.85% Monday.
"From morning till 4.30 (1630 IST), rates (yields on corporate bonds) were at yesterday's (Monday) levels...but fell as G-secs (Indian government bond yields) fell," a dealer at a public sector bank said.
NHPC Ltd.'s bond issuance Tuesday to raise up to INR 20 billion through 15-year separately transferable redeemable principal part structure (STRPP) bonds was fully subscribed, with the state-run entity setting a coupon of 7.67% at the auction. "It (the auction) got a very good response, bids were nearly four times more," a dealer at another state-owned bank said.
According to the bid book accessed by Informist, NHPC received 68 bids aggregating to INR 87 billion in the coupon range of 7.50-8.45%. Mostly pension funds and insurance companies likely bought the papers, with little participation by banks at the auction, dealers said. "NHPC doesn't come much in a year (to issue bonds)...if bids were more and the coupon was less, then it means it was pre-arranged," the dealer quoted in the first instance said.
Bonds worth INR 48.40 billion were issued Tuesday, sharply down from INR 111 billion of papers issued Monday. In the secondary market, deals aggregating INR 60.74 billion were recorded on the National Stock Exchange and BSE combined at 1500 IST, sharply up from INR 49.65 billion at the same time Monday.
Among the actively traded bonds, INR 8 billion of NABARD bonds were traded and INR 4.21 billion worth of Power Finance Corp. Ltd.'s papers were traded. Papers issued by Summit Digitel Infrastructure Pvt. Ltd., Muthoot Fincorp Ltd., Aditya Birla Housing Finance Ltd., and Mangalam Worldwide Ltd. were also actively traded.
On Wednesday, Hyderabad Metropolitan Development Authority will seek bids to raise up to INR 67.21 billion through Separately Transferable Redeemable Principal Part bonds, while 360 One Prime Ltd. plans to raise up to INR 15 billion through floating-rate bonds maturing in July 2028. Hero FinCorp Ltd. plans to raise up to INR 3 billion through two-year bonds while Navi Finserv Ltd. will tap the market to raise up to INR 1.5 billion. EarlySalary Services Pvt. Ltd. will seek bids to raise up to INR 1.25 billion.
Market participants await the outcome of the Reserve Bank of India's Monetary Policy Committee meeting on Jun. 3–5, which will lend cues to the corporate bond yields, dealers said. "People have a wait-and-watch approach...(I) don't think any buying will be there till then," a dealer at a brokerage firm said. "It depends on global factors also...like oil. If (crude oil) prices rise, then yields (on corporate bonds) may rise."
A total of INR 126.61 billion worth of deals were recorded on the NSE and BSE combined, sharply up from INR 80.29 billion Monday.
UDAY BONDS
No Ujwal DISCOM Assurance Yojana bond was traded Tuesday, according to data on the RBI's Negotiated Dealing System-Order Matching system.
BENCHMARK LEVELS FOR CORPORATE BONDS:
Tenure | Tuesday | Monday |
Three-year | 7.88-7.93% | 7.86-7.95% |
Five-year | 7.88-7.90% | 7.90-7.96% |
10-year | 7.80-7.85% | 7.79-7.85% |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Akul Nishant Akhoury
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