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Informist, Friday, Sept. 4, 2026

 

By Nandini Sinha

 

MUMBAI – Yields on corporate bonds ended lower Friday on improved market sentiment amid a high liquidity surplus in the banking system, dealers said. An intraday fall in Brent crude oil prices also supported the fall in yields. Mutual funds sold papers in the two-year and three-year segments. Banks bought papers in the two-year segment, while some banks were on the selling side. 

 

"There was a lack of supply of three-year paper, so banks bought in the two-year segment," a dealer at a public sector bank said. "(Trading in the) long-term (paper) was not that active." "Mutual funds are selling the majority of longer-duration papers... and buyers are pensions and insurance companies," a dealer at a brokerage said.

 

"There's a lot of demand from banks for buying... they have to deploy FCNR (B) (foreign currency non-resident bank deposits)," the dealer at the bank said. The RBI's net liquidity absorption – a proxy for the banking system liquidity surplus – rose to INR 10.31 trillion Thursday from INR 9.70 trillion Wednesday.

 

The yield on three-year bonds issued by the National Bank for Agriculture and Rural Development fell to 7.58–7.60% Friday from 7.62% Thursday, while the indicative yield on NABARD's five-year bonds was at 7.68-7.70% Friday, against 7.70% Thursday. The indicative yield on NABARD's 10-year bond was at 7.70%. 

 

The yield on the 10-year benchmark 6.94%, 2036 Indian government bond settled marginally lower at 6.9625% Friday from 6.9646% Thursday. At 1717 IST, Brent crude oil futures for November delivery were at $95.08 per barrel, down from the day's high of $96.21 per barrel.

 

In the secondary market, deals worth INR 158.87 billion were recorded on the National Stock Exchange and BSE combined Friday, up from INR 123.37 billion Thursday. Indian Railway Finance Corp.'s October 2026 bonds worth INR 11.4 billion were traded. Papers issued by Small Industries Development Bank of India, Indel Money, Bajaj Finance, Power Finance Corp., National Highways Infra Trust, and Cholamandalam Investment and Finance Co. also traded actively.

 

On Monday, Bajaj Housing Finance will seek bids to raise up to INR 20 billion by reissuing its 7.79%, August 2031 bond, dealers said. GMR Airports will seek to raise up to INR 20 billion by issuing three-year bonds. Kotak Mahindra Prime has sought bids for INR 7 billion through bonds maturing in October 2031. Muthoot Microfin plans to raise INR 2.5 billion by issuing two-year bonds. 

 

AlphaGrep Securities plans to raise up to INR 2 billion by issuing bonds maturing in September 2027. IIFL Finance has sought bids for up to INR 1.5 billion through the issuance of seven-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	7.58–7.60%	7.62%
Five-year	7.68-7.70%	7.70%
10-year	7.70%	--

 

 

End

 

US$1 = INR 94.4850

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

 

Edited by Saji George Titus

 

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