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Informist, Thursday, Jul. 16, 2026

 

By Vaishali Tyagi

 

NEW DELHI – Corporate bond yields fell marginally Thursday amid strong buying by mutual funds and banks. Market sentiment improved after Brent crude oil prices slipped below the key $85-per-barrel mark and remained there throughout the day, dealers said. Corporate bond yields also ended lower, tracking the decline in government bond yields. 

 

Brent crude oil futures for September delivery fell to an intraday low of $83.83 per barrel from $84.75 at 0900 IST and $84.22 Wednesday. The yield on the 10-year benchmark government bond ended at 6.75%, down from Wednesday's 6.77%

 

Dealers said there was no aggressive positioning in the secondary market on Thursday. Mutual funds were deploying fresh inflows, while banks were also flush with funds due to ample liquidity in the banking system, dealers said. However, some traders remained cautious and avoided taking large bets, which kept trading volumes lower. "MFs had funds after receiving inflows, but they had been holding back and waiting for market and yields to stabilise," a dealer at a brokerage said. Traders said bonds at the shorter end of the yield curve were actively traded. 

 

The net liquidity absorbed by the RBI, a proxy for banking system liquidity surplus, was INR 1.31 billion Wednesday, down from INR 1.49 trillion Tuesday, according to the latest data.

 

The yield on three-year bonds issued by the National Bank for Agriculture and Rural Development was at 7.38-7.40% compared with 7.40-7.45% Wednesday. The indicative yield on NABARD's five-year bonds fell to 7.36-7.38% from 7.42-7.47%. The tentative yield on NABARD's 10-year bonds was at 7.45.7.48% 

 

In the secondary market, deals worth INR 97.67 billion were recorded on the National Stock Exchange and BSE combined Thursday, compared with INR 113.65 billion on Wednesday. Papers issued by Muthoot Fincorp, Hyderabad Metropolitan Development Authority, Kerala Infrastructure Investment Fund Board, Andhra Pradesh State Beverages Corp., National Bank for Agriculture and Rural Development, and Small Industries Development Bank of India were traded actively Thursday.

 

Primary market volumes remained subdued so far this week due to a lack of significant issuances, except for REC's bond deal on Wednesday, dealers said. Bonds issuances totalled INR 10 billion on Thursday, sharply down from INR 46.50 billion Wednesday. TVS Motor Co. raised INR 5 billion, while HDB Financial Services' bond had yet to be confirmed at the time of reporting.

 

On Friday, bond issuances totalling INR 11.20 billion are scheduled. Most of the issuance will come from non-banking financial companies. Aditya Birla Digital Fashion Ventures plans to raise INR 5 billion through two bond issues with different maturities. Aadhar Housing Finance plans to raise INR 3.5 billion through five-year floating-rate bonds maturing on Jul. 15, 2030. Other issuers include Incred Financial Services and Edel Finance.

 

Market participants expect primary and secondary market activity to remain subdued until fresh cues emerge from global and domestic markets before taking large positions. "Until then, requirement-based trading is likely to continue," the dealer quoted above said. "To push corporate bond yields lower, more aggressive buying is needed. That could come from positive triggers such as Bloomberg's decision on the inclusion of Indian government bonds."

 

Market participants are awaiting Bloomberg's decision on the inclusion of Indian government bonds in its flagship index, with most traders expecting a positive outcome. The announcement is likely to come any time between this week and September, government bond dealers said.  

 

UDAY BONDS

In the secondary market, four Ujwal DISCOM Assurance Yojana bonds worth INR 69.80 million were traded on Thursday, according to data on the RBI's Negotiated Dealing System-Order Matching System.

 

* INR 50.00 million of Madhya Pradesh's 8.02%, 2030 bond was dealt at 7.3314%

* INR 14.00 million of Tamil Nadu's 8.04%, 2029 bond was dealt at 6.8801%

* INR 4.60 million of Punjab's 8.65%, 2028 bond was dealt at 6.8654%

* INR 1.20 million of Tamil Nadu's 7.90%, 2027 bond was dealt at 6.9582%

 

BENCHMARK LEVELS FOR CORPORATE BONDS:

Tenure	Thursday	Wednesday
Three-year	7.38-7.40%	7.40-7.45%
Five-year	7.36-7.38%	7.42-7.47%
10-year	7.45.7.48	--

 

End

 

US$1 = INR 96.35

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

 

Edited by Saji George Titus

 

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