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Informist, Tuesday, Jun. 2, 2026

By Nandini Sinha

MUMBAI – Yields on corporate bonds ended broadly steady from the previous day, with a slight downward bias tracking the movement of Indian government bonds, dealers said. Small Industries Development Bank of India's three-year floating-rate bond auction Tuesday stood as the highlight of the day, with market participants expecting more public sector undertakings to issue such bonds.  

Pension and provident funds were the most active participants at SIDBI's INR 30-billion, three-year floating-rate bond auction, dealers said. The state-run financial institution set the coupon on the bond at a spread of 174 basis points over the 91-day Treasury bill. The coupon came in below market expectations as market participants had expected the spread to be 180-190 bps. 

SIDBI papers worth INR 5.03 billion were traded in the secondary market Tuesday, of which INR 779.8 million belonged to the 2029-segment. On Monday, INR 3.0 billion worth of SIDBI papers were traded in the secondary market. 

A total of INR 123.95 billion worth of deals were recorded on the National Stock Exchange and BSE combined, sharply up from INR 92.52 billion Monday. NABARD papers worth INR 11.55 billion and L&T Finance Ltd. bonds worth INR 6.5 billion were actively traded. Papers issued by UGRO Capital Ltd., and Hyderabad Metropolitan Development Authority were also actively traded. 

Insurance companies, foreign banks and mutual funds were the most active buyers of corporate bonds Tuesday. Mutual funds also sold papers along with some banks. Papers maturing in up to three years were the most actively traded.

The yields on the three-year bonds issued by the National Bank for Agriculture and Rural Development were 7.80-85%, down 2 bps from 7.83-7.85% Monday, while yields on NABARD's five-year bonds were unchanged at 7.80-7.85%. The indicative yields on NABARD's 10-year bonds were 7.70-7.76% against 7.76% Monday. 

Bonds worth INR 48.0 billion were issued Tuesday, sharply higher than INR 2.55 billion worth of papers issued Monday. Muthoot Finance Ltd., the biggest bond issuer Tuesday, raised INR 15 billion through 10-year bonds at a coupon of 8.55%, dealers said. 

The HSBC India Manufacturing Purchasing Managers' Index data for May released on Monday is seen as a positive cue for the corporate debt market. "Demand was more due to capital and consumer goods. Consumer goods (demand) did not rise," a dealer at a private sector bank said, commenting on the PMI data. "Further bonds will come from companies. Corporate bonds, CD (certificates of deposit), CP (commercial papers) will be actively issued and traded." The PMI rose to 55.0 in May from 54.7 in April, indicating a rise in manufacturing activity.

Non-banking financial companies Keertana Finserv Ltd. and Credila Financial Services Ltd. are the major bond issuers slated to tap the corporate bond market Wednesday. Credila Financial will seek bids to raise up to INR 5.5 billion through five-year bonds while Keertana Finserv will tap the market to raise up to INR 1.5 billion through bonds maturing in September 2028.  

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: 

End

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

Edited by Avishek Dutta

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