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Informist, Wednesday, Aug. 19, 2026

 

By Nandini Sinha

 

MUMBAI – High crude oil prices pushed corporate bond yields higher Wednesday, even as some market participants traded cautiously ahead of the release of the minutes of the Reserve Bank of India's Monetary Policy Committee meeting earlier this month, dealers said. At 1700 IST, Brent crude oil futures for October delivery traded at $91.72 per barrel. 

 

"In the morning, yields (on corporate bonds) got better by half to 1 bp (basis point), but they rose 1-2 bps by the afternoon. Market tracked g-secs (government securities) and crude only," a dealer at a state-owned bank said.

 

Mutual funds, banks and insurance companies were the active participants in the secondary market, dealers said. Bonds maturing up to 2029 were traded actively. Some mutual funds were seen selling papers due to redemption pressure, the dealer at the public sector bank said.

 

The yield on three-year bonds issued by the National Bank for Agriculture and Rural Development rose to 7.46% from 7.40–7.45% Tuesday, while the indicative yield on NABARD's five-year bonds increased to 7.49–7.50% from 7.46-7.47% Tuesday. The yield on the 10-year benchmark 6.94%, 2036 Indian government bond ended at 6.82% Wednesday, down from 6.83% Tuesday. 

 

In the secondary market, deals worth INR 138.35 billion were recorded on the National Stock Exchange and BSE combined Wednesday, sharply up from INR 105.62 billion Tuesday. Papers issued by NABARD, REC, Sikka Ports & Terminals, Tata Power Co., Small Industries Development Bank of India, and Manappuram Finance were traded actively. 

 

In the primary market, Tata Capital Housing Finance raised INR 10 billion on Wednesday through a five-year bond issue. The company had planned to raise up to INR 20 billion, but dealers said only the base issue size was subscribed. L&T Finance raised INR 2.35 billion by reissuing bonds maturing in June 2031, less than the planned INR 9 billion. 

 

On Thursday, Cholamandalam Investment and Finance Co. will tap the market to raise up to INR 10 billion by reissuing the 8.64%, July 2029 bond. The issue has a base size of INR 3.5 billion and a green shoe option of INR 6.5 billion. Poonawalla Fincorp will seek bids for up to INR 2 billion through the reissue of the 8.43%, April 2036 bond. The issue has a base size of INR 1.5 billion and a green shoe option of INR 500 million. 

 

Market participants expect corporate bond yields to remain broadly stable Thursday, unless crude prices move significantly. "The market is basically tracking crude oil prices only at the moment," a dealer at a private sector bank said. "If Brent doesn't go higher, then levels should be around this (Wednesday's)." However, the dealer at the state-owned bank said redemption pressure on mutual funds could push yields up 1-2 bps.  

 

BENCHMARK LEVELS FOR CORPORATE BONDS:

Tenure	Wednesday	Tuesday
Three-year	7.46%	7.40–7.45%
Five-year	7.49-7.50%	7.46-7.47%
10-year	--	7.50–7.55%

 

End

 

Edited by Saji George Titus

 

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