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Informist, Thursday, Jun. 11, 2026

 

By Nandini Sinha

 

MUMBAI – Yields on corporate bonds in the secondary market ended higher across tenures Thursday as mutual funds faced redemption pressure and sold bonds, dealers said. Some institutional investors, including insurance companies, sold bonds across tenures to participate in the primary market, which further added to the rise in yields, they said. "Saw some institutions (institutional investors) sell PSUs (public sector undertaking bonds) to buy Bajaj primary (Bajaj Finance bonds issued in primary market)," a dealer at a brokerage firm said. "Also, there were some redemptions pressure on mutual funds." Bajaj Finance Ltd. raised INR 45 billion through two bonds, including one reissue, dealers said.

 

Further, dealers said fresh escalations in the US-Iran war dampened investor sentiment, which also supported a rise in yields. However, the yields moderated from the day's high towards the end of trading hours, tracking the yields on the Indian government bonds. Mutual funds and insurance companies remained the most active participants, while foreign portfolio investors remained absent from the corporate bond market, dealers said. Market participants will track the developments in the west Asia war to take positions. "There is uncertainty (over the war front)...expect it (yields) to be flattish at today's (Thursday) levels," a dealer at a small finance bank said. 

 

The yield on three-year bonds issued by the National Bank for Agriculture and Rural Development was 7.45%, up 5 bps from 7.40% Wednesday, while the yields on NABARD's five-year bonds rose by 5-10 bps to 7.45-50% from 7.40% Wednesday. The indicative yields on NABARD's 10-year bonds were 7.55-7.60%, up 5-10 bps from 7.50-7.55% Wednesday.

 

Traders expect strong participation at the state-run National Bank for Financing Infrastructure and Development's bond auctions Friday. The state-owned entity plans to raise up to INR 50 billion through July 2029 and 10-year bonds. NaBFID's 10-year bond cut-off is expected to be between 7.65-7.70%. "Its (NaBFID's bond) supply is limited...there should be good investor appetite," the dealer at the small finance bank quoted above said. "If EPF (Employees' Provident Fund Organisation) or LIC come, it (cut-off) could fall further (on the 10-year bonds)." 

 

In the secondary market, deals worth INR 87.72 billion were recorded on the National Stock Exchange and BSE combined at 1500 IST Thursday, nearly double the volume of INR 48.36 billion at the same time Wednesday. NABARD papers worth INR 17.35 billion and Small Industries Development Bank of India's papers worth INR 15.95 billion were actively traded. Papers issued by HDB Financial Services Ltd., Bajaj Housing Finance Ltd., Indian Railway Finance Corp. were also actively traded. 

 

Bonds worth INR 134 billion were issued Thursday, up from INR 126.55 billion of papers issued Wednesday. Apart from Bajaj Finance, Muthoot Finance Ltd. also raised funds through the issuance of five-year bonds maturing on Jun. 12, 2031, dealers said. 

 

Friday, LIC Housing Finance Ltd. will seek bids to raise up to INR 30 billion through five-year bonds, while L&T Finance will tap the market to borrow up to INR 15 billion through three-year bonds. Sundaram Finance Ltd. plans to raise INR 12.6 billion through bonds maturing in August 2029, while Kotak Mahindra Prime Ltd. has invited bids to raise INR 4.5 billion through August 2029 bonds. Navi Finserv Ltd. will seek bids for INR 3.75 billion through three bonds with different maturities, including a reissue.

 

A total of deals worth INR 187.65 billion were recorded on the National Stock Exchange and BSE combined Thursday, sharply up from INR 151.36 billion Wednesday.

 

UDAY BONDS

In the secondary market, eight Ujwal DISCOM Assurance Yojana bonds worth INR 72.30 million were traded Thursday, according to data on the RBI's Negotiated Dealing System-Order Matching System.

* INR 25 million of Uttar Pradesh's 8.58%, 2031 bond was dealt at 7.2939%

* INR 19 million of Punjab's 8.61%, 2030 bond was dealt at 7.2171%

* INR 12 million of Uttar Pradesh's 8.77%, 2031 bond was dealt at 7.2972%

* INR 7 million of Tamil Nadu's 8.04%, 2029 bond was dealt at 7.1259%

* INR 3 million of Telangana's 8.04%, 2031 bond was dealt at 7.3002%

* INR 2.50 million of Punjab's 8.47%, 2029 bond was dealt at 7.2005%

* INR 2.30 million of Punjab's 8.65%, 2028 bond was dealt at 7.2114%

* INR 1.50 million of Himachal Pradesh's 7.80%, 2027 bond was dealt at 6.7775%

 

BENCHMARK LEVELS FOR CORPORATE BONDS: 

 

Tenure	Thursday	Wednesday
Three-year	7.45%	7.40%
Five-year	7.45-7.50%	7.40%
10-year	7.55-7.60%	7.50-7.55%

 

End

 

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

 

With inputs from Vaishali Tyagi

Edited by Deepshikha Bhardwaj

 

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