India Corporate Bonds
Short-term bond yields down on buying by mutual funds
This story was originally published at 20:25 IST on 9 July 2026
Register to read our real-time news.Informist, Thursday, Jul. 9, 2026
By Nandini Sinha
MUMBAI – Yields on short-term corporate bonds ended lower Thursday due to strong demand for bonds from mutual funds, dealers said. Yields fell after a sharp rise on Wednesday following US President Donald Trump's comments on Iran. Papers in the 2028–29 segments were most actively traded.
The yield on three-year bonds issued by the National Bank for Agriculture and Rural Development was 7.35-7.37%, a tad lower than 7.37-7.40% Wednesday, while the indicative yield on NABARD's five-year bonds was 7.32-7.34%, a sharp fall from 7.35-7.45% on Wednesday.
A dealer at a private sector bank said yields have been on the higher side since Wednesday, and continued to remain elevated till the morning. "It (yields) was also high during the morning, then mutual funds started buying. They must have got inflows."
"(The) domestic market was fine...but after the development (Trump's comment) yesterday, it has changed. It has gone up a little. There is slight movement of 10-15 basis points, but I think, like the stock market has settled today, maybe the bond market may also now take some breath," a senior official at a state-owned financial development institution said.
Investors had earlier expected corporate bond yields to keep falling, but comments by Trump on Wednesday triggered a sharp spike, against market expectations. "The market will stabilise, yields won't go up aggressively," the dealer at the private sector bank said. "If there's no news (on the US-Iran front), then we may see a small rally (fall in yields) on Monday. Tomorrow (Friday), levels will be same, (they) won't go high."
In the secondary market, deals worth INR 38.41 billion were recorded on the National Stock Exchange and BSE combined, nearly half the INR 66.68 billion worth of deals Wednesday. Papers issued by REC, Poonawalla Fincorp, SI Creva Capital Services, Kosamattam Finance, and HDB Financial Services were actively traded. Mutual funds were the most active buyers of corporate bonds Thursday, while banks were active sellers.
Bonds worth INR 3.35 billion were issued Thursday, sharply lower than issuances worth 121.55 billion Wednesday. Poonawalla Fincorp raised INR 2 billion through the reissuance of 8.43%, April 2036 bonds, dealers said.
On Friday, Navi Finserv Ltd. will seek bids to raise a total of INR 5 billion through the reissuance of four different bonds. Wagholi Estates will tap the market to raise INR 2 billion through bonds maturing in January 2029, and Edel Finance Co. plans to raise INR 1.5 billion through the reissuance of zero-coupon bonds maturing on Jun. 25, 2029.
UDAY BONDS
In the secondary market, six Ujwal DISCOM Assurance Yojana bonds worth INR 505.50 million were traded on Thursday, according to data on the RBI's Negotiated Dealing System-Order Matching System.
* INR 200 million of Tamil Nadu's 8.04%, 2029 bond was dealt at 7.0172%
* INR 100 million of Tamil Nadu's 7.72%, 2029 bond was dealt at 7.0180%
* INR 100 million of Madhya Pradesh's 8.02%, 2030 bond was dealt at 7.4497%
* INR 100 million of Telangana's 7.81%, 2027 bond was dealt at 6.8400%
* INR 3 million of Uttar Pradesh's 8.49%, 2028 bond was dealt at 6.6380%
* INR 2.5 million of Uttar Pradesh's 8.35%, 2029 bond was dealt at 6.7546%
BENCHMARK LEVELS FOR CORPORATE BONDS:
|
Tenure |
Thursday |
Wednesday |
|
Three-year |
7.35-7.37% | 7.37-7.40% |
|
Five-year |
7.32-7.34% | 7.35-7.45% |
|
10-year |
-- | -- |
End
With inputs from Vaishali Tyagi
Edited by Avishek Dutta
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