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Informist, Monday, Jun. 29, 2026

 

By Nandini Sinha

 

MUMBAI – Yields on corporate bonds ended lower Monday, tracking a fall in Indian government bond yields and crude oil prices, dealers said. Insurance companies were seen buying corporate bonds, while mutual funds bought and sold papers. Banks were also seen selling corporate bonds.

 

Papers in the three- to five-year segment were traded the most actively. The current spreads on three- to five-year corporate bonds over state government bonds and Indian government bonds are very attractive, a dealer at a brokerage firm said. "Participants are demanding five-year PSU (public sector undertaking) papers."

"Pensions (pension funds) are quiet since a while or on the selling side," the dealer said. "(Current) yields (are) not attractive enough for them. They already bought a lot when yields were higher."  

 

The yield on the 10-year benchmark Indian government bond settled at 6.75% Monday, down from 6.77% Thursday. Friday, the money market was shut for Muharram.

 

The yield on three-year bonds issued by the National Bank for Agriculture and Rural Development were 7.22%, down from 7.25-7.29% Thursday, while the indicative yields on NABARD's five-year bonds were 7.25-7.28%, down 7-8 basis points from 7.33-7.36% Thursday. The indicative yields on NABARD's 10-year bonds were 7.40-7.42%, compared with 7.40-7.45% Thursday. 

 

In the secondary market, deals aggregating to INR 163.97 billion were recorded on the National Stock Exchange and BSE combined, up from INR 134.39 billion recorded Thursday. Papers issued by LIC Housing Finance, Aditya Birla Finance, Bajaj Finance, India Infradebt, and Kerala Infrastructure Investment Fund Board were traded actively Monday.

 

Bonds worth INR 47.12 billion were slated to be issued Monday. LIC Housing Finance, which had planned to raise up to INR 30 billion through the reissuance of the 7.59%, June 2031 bonds, withdrew its bid, dealers said. A dealer at a state-owned bank speculated that the housing finance company had raised funds last week as well and would have decided they didn't need to raise further. "Maybe they could raise (funds) through ECB (external commercial borrowing)," the dealer said.

 

Sundaram Finance raised INR 7.5 billion by reissuing its August 2028 bonds at INR 100.05, yielding 7.6987%. Lodha Developers raised INR 3 billion through floating-rate bonds maturing in February 2030. 

Tuesday, issuers will seek to raise up to INR 33 billion, dealers said. Traders expect bond issuances to pick up pace from the next quarter.

 

Major issuances on Tuesday include those by Bajaj Housing Finance and L&T Finance. Bajaj Housing Finance plans to raise up to INR 25 billion through four-year bonds, while L&T Finance will tap the market to raise up to INR 3.8 billion by issuing 10-year bonds. India Residential Mortgage Trust will seek bids for INR 1.8 billion by issuing pass-through certificates at 8.10%.

 

Yields on corporate bonds are expected to remain flat due to the lack of any significant cues. "Due to redemption, there could be some selling," the dealer at the state-owned bank said. 

 

UDAY BONDS

In the secondary market, two Ujwal DISCOM Assurance Yojana bonds worth INR 2.50 million were traded Monday, according to data on the RBI's Negotiated Dealing System-Order Matching System.

 

* INR 2.00 million of Telangana's 8.04%, 2031 bond was dealt at 6.8983%

* INR 500,000 of Telangana's 7.98%, 2030 bond was dealt at 7.3502%

 

BENCHMARK LEVELS FOR CORPORATE BONDS: 

 

Tenure	Monday	Thursday
Three-year	7.22%	7.25-7.29%
Five-year	7.25-7.28%	7.33-7.36%
10-year	7.40-7.42%	7.40-7.45%

 

End

 

Edited by Saji George Titus

 

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