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Informist, Friday, Aug. 28, 2026

 

By Nandini Sinha

 

MUMBAI – Yields on three-year corporate bonds ended sharply higher Friday due to selling pressure and a lack of any positive cues, dealers said. The yields also rose, tracking the rise in Indian government bond yields, dealers said. While mutual funds were seen selling papers, banks were both buyers and sellers of corporate bonds, with some public sector banks speculated to have been on the buying side.

 

Dealers speculated a large corporate treasury sold a chunk of National Bank for Agriculture and Rural Development bonds maturing in July 2029, which led to a sharp rise in yields in an otherwise calm market. "Banks were more of buyers today (Friday)," a dealer at a brokerage said. "Specifically, the 2029 segment was active."

 

Mutual funds were seen selling papers maturing in 2033. "There is no positive news coming (on the geopolitical front). The MPC (Monetary Policy Committee) minutes were also hawkish," the dealer said. "There is more liquidity in three-to-five-year (papers), so they (mutual funds) are cutting duration by selling long-term papers. They are booking losses. The ones buying long-term papers are investors, not traders. These are pension funds and insurance companies."

 

The yield on three-year bonds issued by NABARD rose to 7.70% from 7.63–7.65% Thursday, while the indicative yield on NABARD's five-year bonds was unchanged at 7.65-7.68%. The yield on the 10-year benchmark government bond rose to 6.91% Friday from 6.89% Thursday.

 

In the secondary market, deals worth INR 43.54 billion were recorded on the National Stock Exchange and BSE combined at 1500 IST, down from INR 60.53 billion at the same time Thursday. Papers issued by Small Industries Development Bank of India, NABARD, Trust Investment Advisors, Manappuram Finance, Piramal Finance, and Power Finance Corp. were traded actively. NABARD's 7.44%, July 2029 paper worth INR 12.25 billion was traded in the secondary market.  

 

On Monday, Cholamandalam Investment and Finance Co. will tap the market to raise INR 20 billion by issuing perpetual bonds, dealers said. ICICI Home Finance Co. plans to raise INR 4 billion by issuing floating-rate bonds maturing in September 2029, while Navi Finserv plans to raise a total of INR 2 billion through two bonds, including a reissue.

 

Market participants will track developments in the war in West Asia and Brent crude oil prices to take positions Monday. A large liquidity surplus in the banking system, driven by inflows through foreign currency non-resident (bank) deposits, is expected to weigh on corporate bond yields.  More

 

UDAY BONDS

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

 

BENCHMARK LEVELS FOR CORPORATE BONDS:

Tenure	Friday	Thursday
Three-year	7.70%	7.63–7.65%
Five-year	7.65-7.68%	7.65-7.68%
10-year		--

 

 

End

 

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

 

Edited by Saji George Titus

 

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