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Informist, Thursday, Jun. 18, 2026

 

By Nandini Sinha

 

MUMBAI – Yields on corporate bonds ended lower Thursday due to strong demand for public sector undertaking bonds, dealers said. Papers maturing in up to four years were actively traded. Some foreign banks were seen buying corporate bonds, while mutual funds and some banks were seen selling the papers.

 

While mutual funds sold papers on redemption pressure, the selling pressure was offset by the strong demand by buyers for PSU bonds, a dealer at a state-owned bank said.

 

The yields on three-year bonds issued by the National Bank for Agriculture and Rural Development were down 4-5 basis points at 7.32-7.33% from 7.36-7.38% Wednesday, while the indicative yields on NABARD's five-year bonds were 7.35-7.40%, down from 7.40-7.45% Wednesday. The indicative yields on NABARD's 10-year bonds were 7.50-7.55% against 7.54-7.56% Wednesday.

 

Corporate bond yields also tracked the fall in the yields on Indian government bonds. Traders of Indian government bonds speculated about the inclusion of India's Fully Accessible Route bonds to the Bloomberg Global Aggregate Index Thursday, with foreign portfolio investors purchasing the securities, thus pulling down the yields on the Indian government bonds.

 

"(I) don't think there's going to be much impact on corporate bonds (yields)," a dealer at a private sector bank said on the inclusion of India's Fully Accessible Route bonds. "Right now, corporate bonds are focusing on how the flows (foreign currency non-resident bank deposits) are going to be." 

 

Higher inflows from FCNR(B) deposits will lead to a fall in the rates of certificates of deposit, the dealer at the private sector bank said. "There will be lesser CD (certificates of deposit) issued. Mutual funds and banks will go after (corporate) bonds," the dealer said. Corporate bond yields could fall by 10-15 basis points across tenures due to the fall in the rates of short-term debt instruments, dealers said.

 

Bonds worth INR 27.70 billion were issued Thursday, sharply down from INR 55.35 billion Wednesday. Bajaj Auto Credit Ltd. raised INR 5 billion at 8.10% through the issuance of three-year bonds, while SMFG India Credit Co. Ltd. raised INR 4.85 billion at 8.15% through the issuance of three-year bonds.

 

In the secondary market, a total of deals aggregating to INR 200.73 billion were recorded on the National Stock Exchange and BSE combined Thursday, sharply up from INR 126.90 billion Wednesday.

 

Among the actively traded papers, NABARD papers worth INR 16.2 billion were traded and National Bank For Financing Infrastructure and Development bonds worth INR 10.18 billion were traded. Papers issued by REC Ltd., Indel Money Ltd., Power Finance Corp. Ltd. were also traded actively.

 

On Friday, Edel Finance, a wholly-owned subsidiary of Edelweiss Financial Services Ltd., will seek bids to raise INR 1.5 billion through the reissuance of zero-coupon bonds maturing in June 2029, dealers said.

 

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	7.32-7.33%	7.36-7.38%
Five-year	7.35-7.40%	7.40-7.45%
10-year	7.50-7.55%	7.54-7.56%

 

End

 

Edited by Akul Nishant Akhoury

 

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