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Informist, Friday, Aug. 21, 2026

 

By Nandini Sinha

 

MUMBAI – Yields on corporate bonds ended higher Friday due to weak market sentiment amid fears of a rate hike by the Reserve Bank of India's Monetary Policy Committee, dealers said. Elevated crude oil prices and uncertainty about developments in the US-Iran war also lifted yields, along with selling pressure from mutual funds. Short-term bonds maturing in up to three years were the most actively traded.

 

"Mutual funds, foreign banks and primary dealers were net sellers, while (PSUs) public sector undertakings were net buyers (of corporate bonds)," a dealer at a brokerage said. Insurance companies bought paper in the three- to-five-year segment, while pension funds bought paper above the five-year segment. 

 

"Due to continued geopolitical uncertainty, short-term bonds were mostly traded. Volume was high in the 2028, 2029 segments," the dealer at the brokerage said.

 

The yield on three-year bonds issued by the National Bank for Agriculture and Rural Development was 7.62%, up from 7.55–7.57% Thursday, while the indicative yield on NABARD's five-year bonds was 7.58–7.60%, against 7.55–7.60% Thursday. The indicative yield on NABARD's 10-year bond was 7.63–7.65%, up from 7.60–7.65% Thursday.

 

The yield on the 10-year benchmark 6.94%, 2036 Indian government bond ended at 6.85% Friday, down from 6.87% Thursday. At 1720 IST, Brent crude oil for October delivery was at $93.26 per barrel. 

 

In the secondary market, deals worth INR 108.01 billion were recorded on the National Stock Exchange and BSE combined Friday, sharply lower than INR 149.43 billion Thursday. Papers issued by Small Industries Development Bank of India, NABARD, Bajaj Finance, National Bank For Financing Infrastructure and Development, and HDFC Bank were traded actively. 

 

To take positions on Monday, market participants will track developments in the US-Iran war and crude oil prices. "It depends on what happens over the weekend and where crude (price) goes," a dealer at a second brokerage firm said. 

 

Iran President Masoud Pezeshkian Friday said it was time to end the war with the US and Israel as Iran was in a position of power, according to news agency AFP. "It is better that we bring the war to an end now, as we are in a position of power and dignity, and the whole world acknowledges our victory and emphasizes that America has attacked our schools, hospitals and infrastructure in violation of all regulations and is hated around the world," AFP quoted Pezeshkian as saying. 

 

The Iranian leader's statement comes after US Treasury Secretary Scott Bessent Thursday said a new wave of sanctions on Iran would be "the ‌toughest sanctions in history." "It is going to work in Iran and we are going to collapse this regime. It is time for our allies and the rest of the world to make a decision," Bessent told CNBC in an interview.

 

Bond issuances worth INR 57.75 billion are slated for Monday. Power Finance Corp. plans to raise up to a total of INR 50 billion through the issuance of two bonds with different maturities — a three-year and a 15-year bond. The cut-off on the three-year bond is expected to be around 7.45%, while that on the 15-year bond is expected to be 7.60–7.65%, according to market participants.

 

Among other bond issuers on Monday, TVS Credit Services plans to raise up to INR 5 billion through the issuance of six-year bonds. KrazyBee Services will seek bids for up to INR 1.5 billion through the issuance of two-year bonds. 

 

 

UDAY BONDS

In the secondary market, no Ujwal DISCOM Assurance Yojana bonds were traded on Friday, according to data on the RBI's Negotiated Dealing System-Order Matching System.

 

BENCHMARK LEVELS FOR CORPORATE BONDS:

Tenure	Friday	Thursday
Three-year	7.62%	7.55–7.57%
Five-year	7.58–7.60%	7.55–7.60%
10-year	7.63–7.65%	7.60–7.65%

 

End

 

Edited by Avishek Dutta

 

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