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Informist, Tuesday, Sept. 8, 2026

 

By Nandini Sinha

 

MUMBAI – Yields on three-year corporate bonds were unchanged Tuesday due to the lack of any significant cues, while yields on bonds having maturity beyond five years ended higher over fears of a rate hike by the Reserve Bank of India's Monetary Policy Committee, dealers said. Bonds maturing in up to three years were actively traded, with mutual funds seen as the most active participants in the secondary market.

 

"(The corporate bond) market was better (yields fell) in up to 1.5-year segment, in up to JFM (January, February, and March) 2028," a dealer at a state-owned bank said. "Two-to-three-year (segment) was more or less flat. In five-year and above (segments), the market was given (yields rose)."

 

Dealers said three-year bond yields were unchanged, likely due to excess liquidity in the banking system. The net liquidity absorbed by the RBI, a proxy for the liquidity surplus, was INR 10.34 trillion Monday. "The market is expecting CRR (incremental cash reserve ratio to absorb surplus liquidity)," a dealer at a private sector bank said. "RBI has to do something to manage the liquidity."

 

The yield on three-year bonds issued by the National Bank for Agriculture and Rural Development was unchanged at 7.60%, while the indicative yield on NABARD's five-year bonds was 7.70-7.74% against 7.70% Monday. 

 

"(Yields on) long-term (papers) rose maybe due to a rate hike expectation," the dealer at the private sector bank said. "Short-term has seen the effect (of fears of a rate hike) already. 

 

Crude oil prices almost touching $99 per barrel had little effect on short-term corporate bond yields Tuesday, dealers said. "Few weeks ago, yields went up because of crude. (The) market will look at something only for a few days," the dealer at the private sector bank said.

 

In the secondary market, deals worth a total of INR 123.95 billion were recorded on the National Stock Exchange and BSE combined, sharply up from INR 100.17 billion Monday. Papers issued by REC, LIC Housing Finance, NABARD, Small Industries Development Bank of India, Bajaj Finance, and Cholamandalam Investment and Finance Co. were traded actively. Papers issued by housing finance companies were also actively traded in the secondary market, including those issued by LIC Housing Finance, Sundaram Home Finance, and Bajaj Housing Finance. 

 

Wednesday, Vertis Infrastructure Trust will tap the market to raise INR 14.25 billion through the issuance of six-year bonds maturing on Sept. 10, 2032, dealers said. Non-banking financial company 360 ONE Prime will seek to raise up to INR 2.5 billion through the reissue of the 9.15%, June 2029 bonds. 

 

Larsen & Toubro will seek bids for INR 5 billion through three-year tokenised bonds maturing on Sept. 9, 2029 at a fixed coupon of 7.40%. L&T is the second borrower to come up with tokenised bonds after REC. The state-owned power financier Monday raised INR 5 billion through tokenised bonds maturing in May 2028 at a coupon of 7.30%.

 

UDAY BONDS

In the secondary market, three Ujwal DISCOM Assurance Yojana bonds worth INR 152.00 million were traded Tuesday, according to data on the Reserve Bank of India's Negotiated Dealing System-Order Matching System.

 

* INR 100.00 million of Tamil Nadu's 8.04%, 2029 bond was dealt at 7.0201%
* INR 50.00 million of Tamil Nadu's 7.72%, 2029 bond was dealt at 7.0241%
* INR 2.00 million of Uttar Pradesh's 8.75%, 2030 bond was dealt at 7.3516%
 

BENCHMARK LEVELS FOR CORPORATE BONDS:

Tenure	Tuesday	Monday
Three-year	7.60%	7.60%
Five-year	7.70-7.74%	7.70%
10-year	--	--

 

End

 

Edited by Deepshikha Bhardwaj

 

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