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Informist, Tuesday, Jun. 23, 2026

 

By Nandini Sinha

 

MUMBAI – Active buying and selling of corporate bonds kept the yields in the secondary market broadly steady Tuesday, dealers said. Papers maturing in up to three years were traded the most actively. Oil marketing companies and banks were seen buying corporate bonds, while state-owned banks sold papers. Mutual funds also sold corporate bonds due to redemption pressures.

 

"It's the fag end of the quarter and the month," a dealer at a private sector bank said about public sector banks selling corporate bonds. "There was profit-booking (by PSU banks)." Foreign institutional investors did not participate actively in the corporate bond markets, in contrast to their strong participation in the government securities market, where they likely bought long-term Indian government bonds, dealers said.

 

The yields on three-year bonds issued by the National Bank for Agriculture and Rural Development were unchanged at 7.35-7.40% Monday. The indicative yields on NABARD's five-year bonds were 7.40-7.45%, marginally up from 7.37-7.44% Monday. The indicative yield on NABARD's 10-year bonds was unchanged at 7.50-7.55%.

 

"FCNR(B) (foreign currency non-resident bank) deposits will improve domestic liquidity. It's (an) appropriate time to enter the (corporate bond) market, both for buyers and sellers," the dealer said. Most banks have increased their FCNR(B) rates for three- to five-year deposits after the Reserve Bank of India introduced a concessional swap facility earlier this month to attract foreign exchange inflows.

 

External commercial borrowings by public sector companies would depend on the particular entity's leverage, the dealer said, about whether they would prefer to raise funds domestically or internationally. "It depends on the balance sheet of the company. If their needs are less, then domestic borrowing would be preferable." The RBI has also introduced a forex swap facility for external commercial borrowings with maturities of over three years by state-owned companies.

State-owned Power Finance Corp. Tuesday said it has issued dollar-denominated notes worth INR 300 million under the company's $8 billion global medium-term note programme. The notes will mature in June 2031 and carry a coupon of 5.32% per annum, payable semi-annually.

In the secondary market, trade volume aggregating to INR 174.95 billion was recorded on the National Stock Exchange and BSE combined Tuesday, up from INR 141.26 billion recorded on Monday. Papers issued by NABARD, HDB Financial Services, Adani Airport Holdings, Small Industries Development Bank of India, Bajaj Finance, and Hyderabad Metropolitan Development Authority were actively traded Tuesday.

 

The primary market saw bond issuances aggregating to INR 117.40 billion Tuesday, sharply up from INR 48.25 billion issued Monday. Torrent Power raised INR 38 billion by issuing four bonds of different maturities, dealers said. LIC Housing Finance raised INR 35 billion through November 2029 bonds at 7.57%. Bajaj Finance raised INR 20 billion through five-year bonds at 7.92%.

 

On Wednesday, Cholamandalam Investment and Finance Co. plans to raise up to INR 20 billion by issuing seven-year bonds, while Muthoot Finance will seek bids to raise up to INR 20 billion by reissuing the 7.85%, February 2029 bonds. Truhome Finance will tap the market to raise INR 5 billion through three-year floating-rate bonds maturing on Jun. 25, 2029. The coupon on the bond is fixed at 240 basis points above 91-day treasury bills, payable annually.

 

Muthoot FinCorp plans to raise INR 5 billion Wednesday by issuing bonds maturing in December 2031. Tata Projects has sought bids for INR 2.5 billion by issuing three-year bonds, while EarlySalary Services seeks to borrow up to INR 1.2 billion through bonds maturing in June 2029. Aye Finance plans to raise INR 1.4 billion through five-year bonds. 

 

ESAF Small Finance Bank plans to raise INR 850 million by issuing tier-II bonds maturing on Jul. 25, 2032. Banks may issue corporate bonds if they exhaust the regulatory limit on borrowing through certificates of deposit, the dealer at the private sector bank said. 

 

UDAY BONDS

In the secondary market, two Ujwal DISCOM Assurance Yojana bonds worth INR 4.5 million were traded Tuesday, according to data on the RBI's Negotiated Dealing System-Order Matching System.

 

* INR 3 million of Telangana's 8.04%, 2031 bond was dealt at 7.5479%
* INR 1.5 million of Tamil Nadu's 8.04%, 2029 bond was dealt at 6.9797%

 

BENCHMARK LEVELS FOR CORPORATE BONDS: 

 

Tenure	Tuesday	Monday
Three-year	7.35-7.40%	7.35-7.40%
Five-year	7.40-7.45%	7.37-7.44%
10-year	7.50-7.55%	7.50-7.55%

 

End

 

US$1 = INR 94.74

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

 

With inputs from J. Navya Sruthi and Vaishali Tyagi

Edited by Saji George Titus

 

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