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Informist, Wednesday, Jun. 17, 2026

 

By Nandini Sinha

 

MUMBAI – Yields on three-year corporate bonds ended broadly steady Wednesday on lack of any fresh cues pertaining to crude oil prices and the US-Iran war, dealers said. Bonds maturing in up to three years were the most actively traded, with mutual funds and banks buying and selling paper actively.

 

"Little bit of consolidation was there (Wednesday)... that's the rule of the market.... There was no drastic movement (in corporate bond yields)," a dealer at a large state-owned bank said.

The yield on three-year bonds issued by the National Bank for Agriculture and Rural Development was 7.36-7.38%, slightly up from 7.34-7.36% Tuesday, while the indicative yields on NABARD's five-year bonds were 7.40-7.45% against 7.38-7.40% Tuesday. The indicative yields on NABARD's 10-year bonds were unchanged at 7.54-7.56%.

 

Traders expect public-sector undertakings to tap the corporate bond market with issuances of up to five years as the current yields are attractive for borrowers. Long-term corporate bonds are not yet attractive for investors, with little trade seen in the 10-year segment, dealers said. 

 

"They (long-term paper) won't be traded until and unless there is an attractive spread from SDL (state development loans, or state bonds)," the dealer at the state-owned bank said. "The longer ones (corporate bonds) will be untouched (till the spread between them and state bonds widens). SDL is less risky for them (investors)."

 

Short-term bonds have factored in the current market cues and dealers don't expect a sharp fall in their yields. "Monsoon, food inflation may have impact (on short-term corporate bond yields), but that will depend on data," the dealer quoted above said.

 

"It may be that long-term capital is not locked," a dealer at a private-sector bank said on long-term bonds being traded less. "When three-year and five-year (corporate bonds) is giving almost the same return, then they (investors) will go for  less duration (shorter-tenure bonds)... why take the risk," the dealer said.

 

Bonds worth INR 55.35 billion were issued Wednesday, sharply down from issuances worth INR 125.50 billion Tuesday. Bajaj Finance Ltd. raised INR 13.90 billion at 7.80% through the reissue of the 7.07% September 2028 bonds, dealers said. Tata Capital Housing Finance Ltd. raised INR 20 billion at 7.79% through four-year bonds.

 

In the secondary market, deals aggregating to INR 126.90 billion were recorded on the National Stock Exchange and BSE combined, down from INR 144.96 billion Tuesday. Paper issued by NABARD, Small Industries Development Bank of India, LIC Housing Finance Ltd., and Bajaj Finance were traded actively.

 

Thursday, SMFG India Credit Co. Ltd. plans to raise up to INR 8 billion through three-year bonds while Knowledge Realty Trust will tap the market to raise INR 6 billion through bonds maturing in February 2029. Mahindra Rural Housing Finance Ltd. will seek bids to raise up to INR 4 billion through five-year bonds while RAK Ceramics India Pvt. Ltd. looks to raise INR 2 billion through three-year bonds. Bajaj Auto Credit aims to raise INR 5 billion through three-year bonds while 360 ONE Prime Ltd. has sought bids to raise up to INR 2 billion through three-year bonds.

 

Corporate bond yields may rise Thursday after US President Donald Trump said the peace deal with Iran is not final, the dealer at a private-sector bank said. "It's a memorandum of understanding, and if I don't like it (the agreement expected to be signed Friday), we'll go back to shooting at them, dropping bombs on their heads. I don't like it if they don't behave. We'll go right back to dropping bombs right smack in the middle of their head," Trump said at the summit of the Group of Seven developed countries in France.

 

UDAY BONDS

In the secondary market, one Ujwal DISCOM Assurance Yojana bond worth INR 2 million was traded Wednesday, according to data on the RBI's Negotiated Dealing System-Order Matching System.

 

* INR 2 million of Telangana's 8.04%, 2031 bond was dealt at 7.1786%

 

BENCHMARK LEVELS FOR CORPORATE BONDS: 

Tenure	Wednesday	Tuesday
Three-year	7.36-7.38%	7.34-7.36%
Five-year	7.40-7.45%	7.38-7.40%
10-year	7.54-7.56%	7.54-7.56%

 

End

 

Edited by Rajeev Pai

 

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