India Corporate Bonds
Short-term yields sharply lower on crude, gilts fall
This story was originally published at 20:20 IST on 12 June 2026
Register to read our real-time news.Informist, Friday, Jun. 12, 2026
By Nandini Sinha
MUMBAI – Yields on three- and five-year corporate bonds ended sharply lower Friday tracking the fall in crude oil prices and yields on Indian government bonds as optimism grew over a peace deal between the US and Iran, dealers said. While public sector banks were the most active participants in the secondary market, mutual funds were selling.
The yield on three-year bonds issued by the National Bank for Agriculture and Rural Development was 7.34-7.36%, down at least 9 basis points from 7.45% Thursday, while the yields on NABARD's five-year bonds were 7.36-7.37%, down from 7.45-50% Thursday.
"The (corporate bond) yields softened (fell) as gilts (yields on Indian government securities) also softened...across markets they (yields) fell," a dealer at a private sector bank said about improved market sentiment over a possible US-Iran peace deal. The yield on the 10-year benchmark 6.94%, 2036, Indian government bond ended at 6.8957%, down from 6.9240 Thursday. At 1712 IST, Brent crude oil futures for August delivery traded at $87.29, down from $90.38 Thursday.
Bonds worth INR 116.84 billion were issued Friday, down from INR 134 billion of papers issued Thursday. State-run National Bank for Financing Infrastructure and Development raised a total of INR 50 billion through the issuance of two bonds with different maturities. Both the issuances had a base size of INR 5 billion and a green shoe option of INR 20 billion each and were fully subscribed.
NaBFID raised INR 25 billion through July 2029 bonds at a coupon of 7.37% while the remaining INR 25 billion was borrowed at 7.66% through 10-year bonds maturing in June 2036. "There was aggressive bidding," a dealer at a private sector bank said. "Banks, mutual funds, and pension funds were seen participating (in the NaBFID issue)."
Several public sector undertakings – the Housing and Urban Development Corp. Ltd., Small Industries Development Bank of India, and REC Ltd. – will tap the corporate bond market next week. "Compared to two weeks ago, the levels (yields on corporate bonds) are better now," a dealer at a state-owned bank said about PSUs raising funds.
"It is wise to raise (funds) at such levels. Earlier, liquidity was tight, the rupee was weak...some of them who were in dire need of funds even raised at 8%," the dealer at the private sector bank said.
Further, market participants said that the concessional dollar-rupee swap facility announced by the Reserve Bank of India to attract foreign inflows is expected to bring down corporate bond yields.
In the secondary market, deals worth INR 153.56 billion were recorded on the National Stock Exchange and BSE combined Friday, down from INR 187.65 billion Thursday. Papers issued by NABARD, REC Ltd., Power Finance Corp. Ltd., IIFL Samasta Finance Ltd., and Kerala Infrastructure Investment Fund Board were actively traded.
On Monday, Aditya Birla Capital Ltd. will seek bids to raise up to INR 16 billion through two bonds, including a reissue. Jio Credit Ltd. plans to raise up to INR 15 billion through five-year bonds, while ECap Equities Ltd. will tap the market to raise INR 2.25 billion through April 2029 bonds. InCred Financial Services Ltd. plans to raise up to INR 1.5 billion through two-year bonds, whereas Finkurve Financial Services Ltd. has invited bids to raise up to INR 1 billion through two-year bonds.
Dealers said retail inflation data, which came in at 3.93% for May, is not expected to impact the corporate bond yields next week. "It was up (from April) due to personal care expenses, (expect) no impact of it (on yields next week)."
UDAY BONDS
In the secondary market, six Ujwal DISCOM Assurance Yojana bonds worth INR 54 million were traded Friday, 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 7.2848%
* INR 12 million of Uttar Pradesh's 8.77%, 2031 bond was dealt at 7.2878%
* INR 10 million of Uttar Pradesh's 8.71%, 2028 bond was dealt at 6.6996%
* INR 3 million of Telangana's 8.04%, 2031 bond was dealt at 7.2917%
* INR 2.50 million of Punjab's 8.47%, 2029 bond was dealt at 7.1853%
* INR 1.50 million of Himachal Pradesh's 7.80%, 2027 bond was dealt at 6.7221%
BENCHMARK LEVELS FOR CORPORATE BONDS:
|
Tenure |
Friday |
Thursday |
|
Three-year |
7.34-7.36% | 7.45% |
|
Five-year |
7.36-7.37% | 7.45-7.50% |
|
10-year |
-- | 7.55-7.60% |
End
US$1 = INR 95.11
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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