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Informist, Monday, Jun. 1, 2026

 

By Nandini Sinha

 

MUMBAI – Trading in the corporate bond market was dull Monday as traders remained cautious ahead of the Reserve Bank of India's Monetary Policy Committee decision due on Friday, dealers said. While market participants do not expect a rate hike, they are awaiting the committee's commentary for cues on the interest rate trajectory.  

 

Bonds maturing in up to one year were the most actively traded Monday, particularly those in the three-month and four-month segments. Yield on the three-year bonds issued by the National Bank for Agriculture and Rural Development was steady at 7.83-7.85%, while yield on NABARD's five-year bonds was at 7.80-7.85%, compared with 7.80% Friday. The indicative yield on NABARD's 10-year bonds was down 4 basis points to 7.76%. 

 

The effect of the rise in yields on the Indian government bonds Monday was not significant on the corporate bond yields due to the low volumes. The yield on the 10-year 6.48%, 2035 Indian government bond settled at 7.02% Monday, against 7.00% Friday. "Volume has to be there for the effect (on yields) to be seen," a dealer at a state-owned bank said.

 

Bonds worth INR 2.55 billion were issued on Monday, down from INR 3.32 billion on Friday.

 

A total of deals aggregating INR 92.52 billion were recorded on the National Stock Exchange and BSE combined, down from INR 96.72 billion Friday. 

 

Among the actively traded bonds, INR 9.41 billion of NABARD bonds and INR 4.86 billion worth of REC papers were traded Monday. Papers issued by Bajaj Finance, IIFL Finance, Muthoot FinCorp, and India Infrastructure Finance Co. were also actively traded. 

 

Market participants will keenly await the results of the bond auction by the Small Industries Development Bank of India Tuesday. The state-owned financial institution plans to raise up to INR 30 billion through three-year floating-rate bonds maturing on Jun. 4, 2029. The coupon on the bonds will be payable annually and is linked to the 91-day Treasury bill plus a spread, which is yet to be decided. Market participants expect the spread to be 180-190 bps. 

 

"PSUs (public sector undertakings) will look at it (bidding) closely... they may also want to issue FRBs (floating-rate bonds)," the dealer at the public sector bank said. "A rate hike is expected this year... so those who are hedging will participate. (I) expect the auction to be fully subscribed."

 

Besides SIDBI, Muthoot Finance will tap the market on Tuesday to raise INR 15 billion through 10-year bonds, while InCred Financial Services plans to raise up to INR 1.5 billion through bonds maturing in December 2028. Magma General Insurance will seek bids to raise INR 1 billion through 10-year bonds, while Muthoot FinCorp plans to raise INR 1 billion through the reissue of bonds maturing on Dec. 30, 2033. 

 

Deals aggregating INR 92.52 billion were recorded on the National Stock Exchange and BSE combined, down from INR 96.72 billion Friday. 

 

UDAY BONDS

 

In the secondary market, one Ujwal DISCOM Assurance Yojana bond worth INR 5 million was traded on Monday, according to data on the RBI's Negotiated Dealing System-Order Matching System.

* INR 5 million of Telangana's 8.04%, 2031 bond was dealt at 7.6762%

 

BENCHMARK LEVELS FOR CORPORATE BONDS: 

 

Tenure	Monday	Friday
Three-year	7.83-7.85%	7.83-7.85%
Five-year	7.80-7.85%	7.80%
10-year	7.76%	7.80%

 

End

 

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

 

Edited by Saji George Titus

 

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