India Corporate Bonds
Yields down on firm demand from mutual funds
This story was originally published at 19:48 IST on 1 July 2026
Register to read our real-time news.Informist, Wednesday, Jul. 1, 2026
By Nandini Sinha
MUMBAI – Yields on corporate bonds ended lower Wednesday due to a firm demand from mutual funds, dealers said. Bonds maturing in up to five years were actively traded.
Indicative yields on three-year bonds issued by NABARD fell 2 basis points to 7.18-7.20% from 7.20-7.22% Tuesday, while those on five-year bonds fell to 7.22-7.23% from 7.23-7.27% Tuesday.
"There was demand from mutual funds... they had investment from corporates," a dealer at a private sector bank said about the fall in yields. Banks were major sellers of corporate bonds Wednesday, while mutual funds and insurance companies bought papers actively.
In the secondary market, deals aggregating to INR 197.88 billion were recorded on the National Stock Exchange and BSE combined Wednesday, down from INR 236.62 billion Tuesday. NABARD papers worth INR 18.70 billion and REC's zero-coupon bonds worth INR 2.38 billion were traded. Papers issued by Small Industries Development Bank of India, Toyota Financial Services India, Muthoot FinCorp, and Cholamandalam Investment and Finance Company were also actively traded.
The primary market saw bond issuances worth INR 25.55 billion, down from INR 33 billion Tuesday. NIIF Infrastructure Finance raised INR 9.85 billion by issuing two bonds of different maturities, dealers said. HDB Financial Services raised INR 10 billion by issuing bonds maturing in June 2029 at 7.8998%.
With corporate bond yields down, traders expect issuances to rise in July. Bond issuances worth INR 106.45 billion are slated for Thursday. Sammaan Capital plans to raise up to INR 10 billion by reissuing the 8.03%, September 2027 bonds. Poonawalla Fincorp will seek bids to raise up to INR 7.5 billion through bonds maturing in October 2028. Vastu Finserve India has sought bids for up to INR 1.95 billion by issuing three bonds with different maturities, while Muthoot FinCorp will seek bids for INR 1 billion through subordinated tier-II bonds maturing in December 2031.
India Infrastructure Finance Co. Ltd., a state-owned financing company, will seek bids to raise up to INR 20 billion Friday by issuing bonds maturing in June 2031, dealers said. The issue has a base size of INR 5 billion and a greenshoe option of INR 15 billion. The bonds are rated 'AAA' by Care Ratings.
The yields on corporate bonds may fall further this week due to demand for papers from mutual funds, a dealer at a public-sector bank said. "I feel the flows from corporates will be there... so yields will fall again," the dealer said.
UDAY BONDS
In the secondary market, one Ujwal DISCOM Assurance Yojana bond worth INR 1.50 million was traded Wednesday, according to data on the RBI's Negotiated Dealing System-Order Matching System.
* INR 1.50 million of Himachal Pradesh's 7.80%, 2027 bond was dealt at 6.4889%
BENCHMARK LEVELS FOR CORPORATE BONDS:
|
Tenure |
Wednesday |
Tuesday |
|
Three-year |
7.18-7.20% | 7.20-7.22% |
|
Five-year |
7.22-7.23% | 7.23-7.27% |
|
10-year |
-- | 7.38-7.42% |
End
Edited by Saji George Titus
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