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Informist, Thursday, Jun. 4, 2026

 

By Nandini Sinha

 

MUMBAI – Corporate bond yields ended broadly steady on Thursday as traders exercised caution ahead of the Reserve Bank of India's Monetary Policy Committee's rate decision Friday. Mutual funds and insurance companies actively bought and sold corporate bonds, mostly short-term papers.

 

The yield on the three-year bonds issued by the National Bank for Agriculture and Rural Development was 7.82%, almost unchanged from 7.80-7.81% Wednesday. The indicative yields on NABARD's five-year and 10-year bonds were unchanged at 7.80-7.85% and 7.80%, respectively.

 

Deals worth INR 46.80 billion were recorded on the National Stock Exchange and BSE combined at 1500 IST, almost unchanged from INR 46.87 billion at the same time Wednesday. Papers issued by NABARD, IIFL Finance Ltd., Bajaj Housing Finance Ltd., Indian Railway Finance Corp. Ltd., and REC Ltd. were actively traded. 

 

"It's because of MPC (decision) tomorrow (Friday)...traders are conservative," a dealer at a small finance bank said.

 

The rate-setting panel should give clear direction about inflation, a dealer at a private sector bank said. "Market is already pricing inflation...even if RBI gives an optimistic statement, the market won't take it lightly," the dealer said. "One-year corporate bonds have reached 7.90% levels. Across money markets...rates are still high. Even g-secs (Indian government securities) are not below 7%."

 

While traders do not expect the MPC to raise the policy repo rate this time, they are keenly awaiting the rate-setting panel's statement for guidance to take positions. "When inflation is due to supply side, a rate hike doesn't make sense. GDP growth is gradually slowing," the dealer at the private sector bank said. The economy is not in such a "heated situation" as seen during demand-side inflation, the dealer said.

 

"(I am) expecting MPC may indicate a change of stance in the next two policies (MPC meetings). By December, they may start going for a hike," the dealer said. 

 

Corporate bond issuances are not expected to rise substantially after the MPC meeting, even as market participants expect status quo on the interest rate, a dealer at a state-owned financial institution said. "We will assess the market for some time," the dealer said. The corporate bond market may rally if the panel announces measures to support liquidity, the dealer said.

 

Bonds worth INR 31 billion were issued Thursday. Bajaj Housing Finance Ltd. raised INR 20 billion through the reissue of May 2029 bonds, dealers said. Aditya Birla Housing Finance Ltd. raised INR 4.40 billion through three-year bonds maturing on Jun. 5, 2029 at a coupon of 8.22%. The company raised another INR 3.27 billion through five-year bonds maturing on Jun. 5, 2031 at a coupon of 8.25%. 

On Friday, HDB Financial Services Ltd. plans to raise up to INR 6 billion through two bonds, including a reissue. PNB Housing Finance Ltd. will tap the market to raise up to INR 5 billion through five-year bonds. Kotak Mahindra Prime Ltd. will seek bids to raise up to INR 4 billion through the reissue of April 2028 and April 2029 bonds, while Trust Investment Advisors Pvt. Ltd. plans to raise up to INR 1 billion through the issuance of two bonds with different maturities -- a nine-year and a 10-year bond. 

 

 

A total of INR 103.85 billion worth of deals were recorded on the National Stock Exchange and BSE combined, down from INR 104.56 billion Wednesday. 

 

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	7.82%	7.80-81%
Five-year	7.80-85%	7.80-85%
10-year	7.80%	7.80%

 

End

 

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

 

With inputs from Vaishali Tyagi

Edited by Avishek Dutta

 

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