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Informist, Monday, Jul. 6, 2026

By Vaishali Tyagi

NEW DELHI – Yields on corporate bonds in the secondary market ended higher across tenures as traders took profits in the absence of major cues, dealers said. Corporate bond yields also ended higher across tenures as mutual funds, facing redemption pressure, sold bonds.

"There is no negative news, everything is positive... so money market rates are consolidating as traders buy and sell bonds to book profits at levels that suit them," a dealer at a broking firm said. "Also, a lot of big asset management companies are facing redemption pressure and sold bonds to meet their requirements... also the reason for rise in yields today (Monday)."

A dealer at a non-banking finance company said sentiment had turned sharply positive last week. Earlier, corporate bond yields fell tracking government bonds on hopes of the inclusion of Indian gilts in Bloomberg's Global Aggregate Index, which had boosted buying interest in the secondary market. Now, with yields having corrected, investors are selling for profit. "Falling yields have prompted investors to churn their folios by selling and purchasing bonds wherever opportunities arise, in both the primary and secondary markets," the dealer said.

The yield on three-year bonds issued by the National Bank for Agriculture and Rural Development rose to 7.24-7.26% Monday from 7.15-7.20% Friday. The yield on NABARD's five-year bonds also rose to 7.25-7.27% from Friday's 7.20-7.21%. Dealers said there were no trades in the 10-year segment of NABARD.

Market participation remained subdued as some dealers in the Mumbai region could not reach their desks because of incessant rainfall, dealers said. Most trading activity was seen in bonds maturing in up to three years. Mutual funds were sellers while banks and a handful of insurance companies turned buyers towards the close.

In the secondary market, deals worth INR 115.61 billion were recorded on the National Stock Exchange and BSE combined Monday, down from INR 135.74 billion Friday. Paper issued by Kerala Infrastructure Investment Fund Board, Andhra Pradesh State Beverages Corp., HDFC Credila Financial Services, The Andhra Pradesh Mineral Development Corp., Muthoot Fincorp, Adani Enterprises, Navi Finserv, and Keertana Finserv were actively traded Monday. 

In the primary market, bonds aggregating to nearly INR 74 billion were issued Monday, sharply down from INR 178.80 billion Friday, which included a state-owned entity and large non-banking finance companies. Jio Credit raised INR 9.65 billion at a coupon of 7.78% through three-year bonds maturing on Jul. 7, 2029. Tata Capital borrowed INR 37.50 billion through two bonds with different maturities while Bajaj Housing Finance mopped up INR 15 billion through September 2029 bonds.

Tuesday, bonds worth over INR 25 billion will be issued. NTPC's subsidiary NTPC Green Energy has invited bids to raise up to INR 25 billion through the issuance of 10-year bonds maturing on Jul. 9, 2036. Share India Securities will also raise funds Tuesday.

Even though issuances have fallen for some time, market participants expect activity to pick up and sentiment to stay positive in the near term. Yields have fallen sharply, more than what the market had expected. The market is correcting itself through buying and selling, dealers said. 

A fund manager said the corporate bond market has improved, now that major events have fallen into place. If yields have to fall further, buying will need to pick up to clear the path for fresh bets. "I see yields falling at least 4-5 bps (basis points) more across segments if the environment in markets remains positive and Indian bonds are included in Bloomberg's Global Aggregate Index," the fund manager said.

Wednesday, Small Industries Development Bank of India has invited bids to raise up to INR 80 billion through the issuance of bonds maturing on Nov. 9, 2029. An official at SIDBI expects the coupon on the bond to be in the range of 7.05-7.10%.

UDAY BONDS

In the secondary market, trades worth INR 1 million were recorded in one Ujwal DISCOM Assurance Yojana bond Monday, according to data on the RBI's Negotiated Dealing System-Order Matching System.

* INR 1 million of Punjab's 8.47%, 2029 bond was dealt at 6.8441%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Rajeev Pai

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