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Informist, Monday, Aug. 31, 2026

 

By Nandini Sinha

 

MUMBAI – Yields on corporate bonds ended higher Monday, tracking yields on Indian government bonds and renewed military hostilities between the US and Iran, which pushed crude oil prices above the crucial $90-per-barrel level. In the first exchange of strikes since July, the US struck Larak Island in the key waterway of the Strait of Hormuz on Sunday, followed by Tehran's strikes on two US bases in Jordan. At 1724 IST, Brent crude oil futures for November delivery were at $91.18 per barrel.

 

Public sector banks bought papers across major segments, while mutual funds and private-sector banks actively sold papers in the five- and 10-year segments. However, the secondary market saw no aggressive selling or buying, a dealer at a public sector bank said. "Irrespective of the market, PSU banks are on the buying side," a dealer at a private sector bank said.

 

The yield on three-year bonds issued by NABARD rose to 7.68-7.74% from 7.70% Friday, while the indicative yield on NABARD's five-year bonds was 7.73.-7.75%, up from 7.65-7.68% Friday. The yield on the 10-year benchmark Indian government bond settled at 6.95% Monday, up from 6.91% Friday.

 

Secondary market volume more than doubled to INR 126 billion Monday from INR 57.75 billion Friday. Papers issued by Jamnagar Utilities & Power, Cholamandalam Investment and Finance Co., Kotak Mahindra Prime, REC, Piramal Finance, State Bank of India, and Bajaj Housing Finance were traded actively.

 

In the primary market, Cholamandalam Investment and Finance Co. Monday raised INR 20 billion by issuing perpetual bonds, dealers said. Bond issuances are seen rising over three times Tuesday from Monday, with borrowers slated to seek bids for up to INR 89.90 billion. The rise in swap rates indicates an impending rate hike, prompting market participants to front-load their borrowings, the dealer at the private sector bank said.

 

Small Industries and Development Bank of India will tap the market to raise up to INR 60 billion by issuing bonds maturing on Oct. 10, 2029, dealers said. The cut-off is expected to be between 7.68–7.73%, market participants said. 

 

Bidding at the SIDBI bond auction is expected to be aggressive, with participation from foreign banks as well, the dealer at the private sector bank said. "Three-year, one-month is a crucial segment. This bucket is purely for liquidity purposes," the dealer said. "Expect cut-off (on SIDBI bonds) to be around 7.68-.70%. Even 50-year G-Sec (Indian government securities) is not giving that much rate."

 

Among other borrowers, L&T Finance will seek bids for up to INR 10 billion by reissuing the 7.8384%, September 2029 bond, while IIFL Finance will seek bids for up to INR 6 billion by issuing two-year bonds. Aditya Birla Capital plans to raise up to INR 5 billion by reissuing zero-coupon bonds maturing on Jun. 25, 2031.

 

CreditAccess Grameen will seek to raise up to INR 3 billion by issuing two bonds with different maturities. ECap Equities will seek bids for INR 2.75 billion by issuing bonds maturing in April 2031. Progfin will seek to raise up to INR 1.50 billion by issuing bonds maturing in January 2028.  

 

UDAY BONDS

In the secondary market, one Ujwal DISCOM Assurance Yojana bond worth INR 10.00 million was traded Monday, according to data on the RBI's Negotiated Dealing System-Order Matching System.

 

* INR 10.00 million of Uttar Pradesh's 8.59%, 2030 bond was dealt at 7.6607%

 

BENCHMARK LEVELS FOR CORPORATE BONDS:

Tenure	Monday	Friday
Three-year	7.68-7.74%	7.70%
Five-year	7.73.-7.75%	7.65-7.68%
10-year	--	--

 

End

 

Edited by Saji George Titus

 

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