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Informist, Monday, Aug. 3, 2026

 

By Vaishali Tyagi

 

MUMBAI – Corporate bond yields ended broadly steady on Monday after rising earlier in the day. A knee-jerk sell-off at the open was triggered as traders reacted to news from Friday evening, when Bloomberg Index Services Ltd. said it had deferred the inclusion of India's fully accessible route bonds in its flagship Global Aggregate Index, dealers said. 

 

During the day, traders built positions as government bond yields fell due to a decline in Brent crude prices, dealers said. Further, continued inflows into foreign currency non-resident deposits boosted investor sentiment, which limited the rise in corp bond yields, dealers said. 

 

"The market remained on the fence for most of the day as people stayed cautious...Bloomberg news was the trigger at the start of the day," a dealer at a brokerage firm said. "But later, fall in crude prices brought some buying into the market as gilts (yields) also moved up."

 

The yield on three-year bonds issued by the National Bank for Agriculture and Rural Development was at 7.40-7.42%, broadly unchanged from 7.41-7.44% Friday. The indicative yield on NABARD's five-year bond was at 7.38–7.44%, similar to 7.37–7.42% the previous day. The indicative yield on NABARD's 10-year bonds remained broadly unchanged at 7.45–7.50% due to subdued activity in the segment. 

 

Dealers said traders remained cautious ahead of the Reserve Bank of India's Monetary Policy Committee decision on Wednesday. The MPC is widely expected to keep interest rates on hold and retain a neutral stance, amid uncertainty over the impact of the West Asia conflict and El Nino conditions on growth and inflation. Traders will also closely watch comments from RBI Governor Sanjay Malhotra. 

 

In the secondary market, deals worth INR 101.72 billion were recorded on the National Stock Exchange and BSE combined Monday, down slightly from INR 102.89 billion Friday. Papers issued by Aditya Birla Capital, Kerala Infrastructure Investment Fund Board, U.P. Power Corp., Piramal Finance, Muthoot Finance, IIFL Samasta Finance, Lucina Land Development, Telangana State Industrial Infrastructure Corp., and Indian Railway Finance Corp were actively traded Friday. A lot of foreign institutional investors sold bonds along with a handful of banks, and insurance companies, which pushed yields marginally higher. Later, pension funds, mutual funds and a few insurance companies were seen buying which pulled back yields closer to Friday's levels. 

 

On primary market side, issuances worth over INR 24.45 billion were issued Monday, less than half the INR 70 billion issued Friday. Bajaj Housing Finance has raised INR 18.87 billion through 10-year bonds maturing on Aug. 4, 2036. Care Health Insurance borrowed INR 2 billion via 10-year bonds. 

 

Tuesday, the primary market is expected to pick up as issuances worth over INR 84 billion will tap the corporate bond market. National Bank for Agriculture and Rural Development plans to tap the market to raise up to INR 80 billion through the issuance of bonds maturing on Sept. 17, 2031, dealers said. KF Finance will raise up to INR 2 billion, while Marwadi Chandarana Intermediaries Brokers plans to raise up to INR 1.5 billion. 

 

Traders said significant selling was seen in the market as participants likely sold bonds to make space for NABARD's issuance on Wednesday. "There was notable selling by foreign banks....we are not sure if it is to create space for tomorrow's NABARD auction or for some other reason", a dealer at another brokerage firm said. Market participants expect NABARD's issuance to be well received, with good participation from investors. They expect the cut-off to be around 7.45%.

 

UDAY BONDS

In the secondary market, five Ujwal DISCOM Assurance Yojana bonds worth INR 59.53 million were traded Monday, according to data on the RBI's Negotiated Dealing System-Order Matching System.

 

* INR 16.50 million of Rajasthan's 7.40%, 2027 bond was dealt at 7.3474%.

* INR 13.56 million of Uttar Pradesh's 8.63%, 2029 bond was dealt at 7.5899%.

* INR 11.79 million of Tamil Nadu's 7.74%, 2029 bond was dealt at 7.6055%.

* INR 11.79 million of Telangana's 8.08%, 2029 bond was dealt at 7.5995%.

* INR 5.89 million of Madhya Pradesh's 8.05%, 2029 bond was dealt at 7.4991%.

 

BENCHMARK LEVELS FOR CORPORATE BONDS:

Tenure	Monday	Friday
Three-year	7.40-7.42%	7.41-7.44%
Five-year	7.38–7.44%	7.37–7.42%
10-year	7.45–7.50%	7.45–7.50%

 

End

 

Edited by Deepshikha Bhardwaj

 

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