India Corporate Bonds
3-year yields rangebound; SIDBI bonds see aggressive bids
This story was originally published at 19:39 IST on 1 September 2026
Register to read our real-time news.Informist, Tuesday, Sept. 1, 2026
By Nandini Sinha
MUMBAI – Yields on three-year corporate bonds were range-bound Tuesday, tracking Brent crude oil prices and overnight indexed swap rates, dealers said. Mutual funds and banks were the most active participants in the secondary market, with papers maturing in up to five years being traded actively. In the primary market, aggressive bids were seen for the Small Industries Development Bank of India's October 2029 bonds.
SIDBI raised INR 58.89 billion at a 7.70% coupon, dealers said. The state-owned financial institution had planned to raise up to INR 60 billion through the issue. L&T Finance raised INR 5 billion through the reissue of the 7.8384% September 2029 bond, with only the base issue being subscribed.
The SIDBI auction saw aggressive demand from banks, mutual funds, and pension funds, dealers said. SIDBI received bids aggregating to INR 139.65 billion in the coupon range of 7.47-7.89%, according to the bid book accessed by Informist. The base issue was getting subscribed at 7.68%, while the full issue, including the green shoe option, was getting subscribed at 7.71%.
L&T Finance raised INR 5 billion, against plans to raise up to INR 10 billion by reissuing the September 2029 bonds, dealers said. The issue had a base size and a green shoe option of INR 5 billion each.
In the secondary market, mutual funds were seen buying papers in the three-year to five-year segment, while pension funds sold papers in the same segment, a dealer at a private sector bank said. "Whoever bought papers in the three-to-five-year segment in May was selling today," the dealer said.
The yield on three-year bonds issued by NABARD was at 7.71% compared with 7.68-7.74% Monday, while the indicative yield on NABARD's five-year bonds was 7.70-7.72%, down from 7.73.-7.75% Monday. The yield on the 10-year benchmark Indian government bond settled at 6.96% Tuesday, up from 6.95% Monday.
The one-year swap rate ended at 6.02% Tuesday, up from 6.00% Monday. The five-year swap rate ended at 6.51% Tuesday, up from 6.48% in the previous close. At 1736 IST, Brent crude oil futures for November delivery were at $92.03 per barrel, slightly down from the day's high of $92.55 per barrel.
In the secondary market, deals worth INR 109.39 billion were recorded on the National Stock Exchange and BSE combined, down from INR 126 billion Monday. Papers issued by SIDBI, REC, Indian Railway Finance Corp., Bajaj Housing Finance, and Hero Fincorp were traded actively.
Wednesday, Balkrishna Industries will tap the market to raise up to INR 5.50 billion by issuing three bonds with different maturities. Akara Capital Advisors will seek bids for up to INR 1 billion through bonds maturing in December 2027.
Power Finance Corp. will tap the primary market Thursday to raise up to INR 50 billion by issuing two bonds with different maturities. The bonds, a five-year and a 10-year issue, have a base size of INR 5 billion each and a green shoe option of INR 20 billion each.
UDAY BONDS
In the secondary market, two Ujwal DISCOM Assurance Yojana bonds worth INR 7.50 million were traded Tuesday, according to data on the RBI's Negotiated Dealing System-Order Matching System.
* INR 6.00 million of Telangana's 8.27%, 2028 bond was dealt at 7.23%
* INR 1.50 million of Tamil Nadu's 8.04%, 2029 bond was dealt at 6.85%
BENCHMARK LEVELS FOR CORPORATE BONDS:
|
Tenure |
Tuesday | Monday |
|
Three-year |
7.71% | 7.68-7.74% |
|
Five-year |
7.70-7.72% | 7.73.-7.75% |
|
10-year |
-- | -- |
End
US$1 = INR 94.9500
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Saji George Titus
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