India Corporate Bonds
3-year yields steady; traders focus on liquidity, crude
This story was originally published at 19:43 IST on 2 September 2026
Register to read our real-time news.Informist, Wednesday, Sept. 2, 2026
By Nandini Sinha
MUMBAI – Yields on three-year corporate bonds ended steady Wednesday after moving in a narrow range during most of the trading hours as traders stayed cautious, tracking the liquidity surplus, Indian government bond yields, and crude oil prices, dealers said. Market participants actively bought short-term papers, while the demand for long-term papers remained low due to uncertainty over the US-Iran war.
The indicative yield on three-year bonds issued by NABARD was 7.70–7.72% against 7.71% Tuesday, while the indicative yield on NABARD's five-year bonds rose to 7.73–7.75% against 7.70-7.72% Tuesday. The yield on the 10-year benchmark Indian government bond settled at 6.98% from 6.96% Tuesday.
"I think the market has started pricing in rate hike scenario (by the Reserve Bank of India's Monetary Policy Committee)," a dealer at a private sector bank said. While Brent crude oil prices fell intraday, they remained well above the crucial level of $90.
Liquidity surplus rising to an over-four-year high led to a fall in short-term bond yields, some dealers said. The net liquidity absorbed by the RBI— a proxy for liquidity surplus — rose to INR 7.76 trillion Tuesday, from INR 6.65 trillion Monday.
In the secondary market, deals worth INR 138.16 billion were recorded on the National Stock Exchange and BSE combined, up from INR 109.39 billion Tuesday. Papers issued by Bharti Telecom, REC, Bajaj Finance, Telangana State Industrial Infrastructure Corp., and Manappuram Finance were traded actively.
Power Finance Corp. Ltd. will tap the primary market Thursday to raise up to a total of INR 50 billion through the issuance of two bonds with different maturities. Both the bonds have a base size of INR 5 billion each and a green shoe option of INR 20 billion each. The five-year bond will mature on Sept. 8, 2031, and the 10-year bond will mature on Sept. 8, 2036.
The cut-off on PFC's five-year bonds is expected to be in the range of 7.65–7.70%, while that on 10-year bonds is expected to be 7.70–7.80%, according to market participants. While mutual funds and banks are expected to participate in the auction for five-year bonds, pension funds and insurance companies are likely to bid for the 10-year paper.
UDAY BONDS
In the secondary market, one Ujwal DISCOM Assurance Yojana bond worth INR 5.89 million was traded Wednesday, according to data on the RBI's Negotiated Dealing System-Order Matching System.
* INR 5.89 million of Madhya Pradesh's 8.05%, 2029 bond was dealt at 7.1295%
BENCHMARK LEVELS FOR CORPORATE BONDS:
|
Tenure |
Wednesday | Tuesday |
|
Three-year |
7.70–7.72% | 7.71% |
|
Five-year |
7.73–7.75% | 7.70-7.72% |
|
10-year |
-- | -- |
End
US$1 = INR 94.97
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Deepshikha Bhardwaj
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2026. All rights reserved.
To read more please subscribe
Share this Story:
