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Informist, Thursday, Aug. 20, 2026

 

By Nandini Sinha

 

MUMBAI – Yields on corporate bonds ended sharply higher Thursday after a volatile trading session as market participants priced in the likelihood of a rate hike by the Reserve Bank of India's Monetary Policy Committee in the current financial year, dealers said. Market participants said the minutes of the policy meeting earlier this month were viewed as "hawkish". Selling pressure from mutual funds also pushed yields higher. The rise in Indian government bond yields and crude oil prices also weighed on corporate bond yields.

 

"Due to the (MPC) minutes, the interpretation is hawkish. The market reacted negatively to it," a dealer at a state-owned bank said. "Rising crude prices and inflation fears would have to be priced in." 

 

"Some mutual funds are offloading and taking new positions," a dealer at a private-sector bank said. "They take whatever levels they want. They are the market makers."

 

Mutual funds may have sold paper on redemption pressure and also for payment of goods and services tax, dealers said. "Rates could remain up because of GST outflows," the dealer at a state-owned bank said.

The yield on three-year bonds issued by the National Bank for Agriculture and Rural Development was 7.55–7.57%, up 9–11 basis points from 7.46% Wednesday. The indicative yield on NABARD's five-year bonds was 7.55–7.60%, up from 7.49–7.50% Wednesday. The indicative yield on NABARD's 10-year bond was 7.60–7.65%.

 

The yield on the 10-year benchmark 6.94%, 2036 Indian government bond ended at 6.87% Thursday, up from 6.82% Wednesday. Brent crude oil futures for October delivery jumped to $94.34 per barrel Thursday, the highest since Jul. 24.

 

In the secondary market, deals worth INR 149.43 billion were recorded on the National Stock Exchange and BSE combined Thursday, up from INR 138.35 billion Wednesday. Paper issued by NABARD, Small Industries Development Bank of India, Power Finance Corp., and Bajaj Finance were traded actively.

 

Cholamandalam Investment and Finance Co. Ltd. raised INR 3.5 billion through the reissue of its 8.64%, July 2029 bonds, dealers said. Poonawalla Fincorp Ltd. raised INR 1.5 billion through the reissue of 8.43%, April 2036 bonds.

 

Friday, Mindspace Business Parks REIT plans to raise INR 5 billion through the issuance of bonds maturing on Sept. 26, 2028, dealers said. Kisetsu Saison Finance (India) will seek bids for INR 4 billion through the issuance of bonds maturing in February 2028. Muthoot Capital Services will tap the market to raise INR 1 billion through the issuance of three-year bonds while ECap Equities Ltd. will seek to raise INR 2.25 billion through the reissue of 10.30%, April 2029 bonds. 

 

UDAY BONDS

In the secondary market, one Ujwal DISCOM Assurance Yojana bond worth INR 3 million was traded Thursday, according to data on the RBI's Negotiated Dealing System-Order Matching System.

 

* INR 3 million of Uttar Pradesh's 8.44%, 2029 bond was dealt at 7.1523%

 

BENCHMARK LEVELS FOR CORPORATE BONDS:

Tenure	Thursday	Wednesday
Three-year	7.55–7.57%	7.46%
Five-year	7.55–7.60%	7.49-7.50%
10-year	7.60–7.65%	--

 

End

 

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

 

Edited by Rajeev Pai

 

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