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Informist, Wednesday, Sept. 9, 2026

 

By Nandini Sinha

 

MUMBAI – Yields on corporate bonds ended broadly steady Wednesday despite Brent crude oil crossing the $100 per-barrel mark. Corporate bond yields were steady thanks to the high surplus liquidity in the banking system. Mutual funds were the most active buyers while banks and primary dealers were the most active sellers in the secondary market.

 

Brent crude oil futures for November delivery rose past $100 per barrel Wednesday for the first time since July as the military escalation in the US-Iran war intensified fears of disruptions in energy supply. US ally Saudi Arabia accused the Iran-backed Houthis in Yemen of attacking its energy facilities Tuesday. In the most recent direct flare-up, the US hit Iranian tankers, with Tehran striking a US base in Jordan and vessels in the Strait of Hormuz in response.

 

The yield on three-year bonds issued by the National Bank for Agriculture and Rural Development was 7.60–7.62% against 7.60% Tuesday while the indicative yield on NABARD's five-year bonds was 7.68-7.75%, against 7.70-7.74% Tuesday. The indicative yield on NABARD's 10-year bonds was 7.70–7.71%.

 

Volumes fell in the secondary market as of 1500 IST compared to the same time Tuesday as market participants traded cautiously amid fears of a rate hike by the Reserve Bank of India's Monetary Policy Committee. Traders are also awaiting the announcement of some measure by the RBI to absorb the huge surplus liquidity.

 

"Volume (in the secondary market) has fallen around 30% from last week," a dealer at a broking firm said. "New inflows have halted. People are trading cautiously right now. They are in a wait-and-watch mode."

 

In the secondary market, deals worth INR 63.34 billion were recorded on the National Stock Exchange and BSE combined at 1500 IST, down from INR 74.43 billion at the same time Tuesday. However, deals picked up towards the end of trading hours to end almost unchanged from Tuesday's final volume of INR 123.95 billion. Paper issued by Cholamandalam Investment and Finance Co., Apex Homes, Bajaj Finance, Small Industries Development Bank of India, Telangana State Industrial Infrastructure Corp., and Power Finance Corp. were traded actively.

 

"Insurance (companies) and pension funds are in wait-and-watch mode. Everyone is waiting for the RBI to come up with something," the dealer at the broking firm said. The net liquidity absorbed by the RBI, an indicator of the liquidity surplus, was INR 10.49 trillion Tuesday. "Maybe the RBI will introduce iCRR (incremental cash reserve ratio). Two-three-day VRRRs (variable rate reverse repo auctions) are not going to help," a dealer at a private-sector bank said.

 

Thursday, Sammaan Capital Ltd. will tap the market to raise up to INR 10 billion through two bonds--a three-year paper and a five-year paper, dealers said. Sundaram Home Finance will seek bids to raise INR 5.10 billion through the issuance of five-year bonds. Vivriti Capital will seek bids for INR 1.50 billion through the issuance of two bonds with different maturities. 

 

Aavas Financiers Ltd. plans to raise INR 1 billion through the issuance of five-year floating rate bonds. The coupon on the bonds has been fixed at 220 basis points above the three-month Mumbai Interbank Outright Rate, payable quarterly. 

 

UDAY BONDS

In the secondary market, one Ujwal DISCOM Assurance Yojana bond worth INR 4.50 million was traded Wednesday, according to data on the Reserve Bank of India's Negotiated Dealing System-Order Matching System.

* INR 4.50 million of Uttar Pradesh's 8.77%, 2031 bond was dealt at 7.1802%
 

BENCHMARK LEVELS FOR CORPORATE BONDS:

Tenure	Wednesday	Tuesday
Three-year	7.60-7.62%	7.60%
Five-year	7.68-7.75%	7.70-7.74%
10-year	7.70-7.71%	--

 

End

 

US$1 = INR 95.1050

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

 

Edited by Rajeev Pai

 

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