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Informist, Thursday, Sept. 17, 2026

 

By Nandini Sinha

 

MUMBAI – Yields on corporate bonds ended broadly steady Thursday, tracking yields on Indian government bonds, dealers said. The US Federal Open Market Committee's interest rate hike had little impact on bond yields as it was expected, and the hike had been priced in, dealers said. The secondary market saw mixed participation, with banks and mutual funds seen actively buying as well as selling papers. Pension funds and insurance companies were seen on the buying side. 

 

The US Federal Market Open Committee raised the fed funds target rate for the first time since 2023 by 25 basis points to 3.75–4.00% Wednesday in a unanimous decision. Market participants said they were now awaiting the decision on the policy repo rate by the Reserve Bank of India's Monetary Policy Committee at its meeting in October. 

 

"It (yields on corporate bonds) was flattish. The rate hike was expected...so less reaction (to the hike)," a dealer at a broking firm said. "Fed (US Federal Reserve's) rate hike was already priced in...some segments were flat," a dealer at a state-owned bank said. "G-secs also not much movement was there. But it ended better." The yield on the 10-year benchmark Indian government bond settled at 7.0463%, down from 7.0524% Wednesday.

 

The indicative yield on three-year bonds issued by the National Bank for Agriculture and Rural Development was 7.75–7.80% against 7.75-7.78% Wednesday, while the indicative yield on NABARD's five-year bonds was unchanged at 7.80–7.85%. The indicative yield on NABARD's 10-year bonds was 7.85% against 7.82–7.85% Wednesday. 

In the secondary market, deals worth INR 35.27 billion were recorded on the National Stock Exchange and BSE combined as at 1500 IST, up from INR 33.02 billion at the same time Wednesday. Papers issued by REC, Export Import Bank of India, HDB Financial Services, Bajaj Finance, Shriram Finance, NABARD, and Power Grid Corp. of India were actively traded. Dealers speculated that a mutual fund treasury sold a chunk of National Bank for Financing Infrastructure and Development's bonds maturing in 2029. 

 

In the primary market, L&T Finance raised INR 6.5 billion through the reissue of the 7.84%, September 2029 bond, dealers said. Care Health Insurance raised INR 1 billion through the issuance of 10-year bonds.

 

On Friday, market participants will seek to raise up to 58.65 billion through issuances. Piramal Finance will seek bids to raise up to INR 20 billion through the issuance of bonds maturing in November 2029, while DMI Finance will seek bids for up to INR 18.15 billion through the issuance of six bonds with different maturities. 

 

TVS Credit Services plans to raise up to INR 10 billion through the issuance of three-year bonds, while Century Silicon City plans to raise INR 5.5 billion through the issuance of three-year bonds. Ballarpur Industries will seek bids for INR 1 billion through the issuance of three-year zero-coupon bonds.

 

Kisetsu Saison Finance (India) has sought bids for INR 2 billion through the issuance of two-year bonds, while IIFL Finance plans to raise up to INR 1.5 billion through the reissue of the 9.25%, September 2028 bond.

 

Dealers are divided over whether primary market issuances are expected to rise ahead of the MPC meeting in October. While two dealers said they expect front-loading of corporate bond issuances, another said most issuers are likely to tap the primary market after the October rate decision, a factor also responsible for the low trading volume in the secondary market. 

 

Traders expect corporate bond yields to be broadly steady amid caution ahead of the MPC decision. "Crude (price) has also come down. NBFCs (non-banking financial companies) may come up (in the primary market) before MPC. A rate hike (by the MPC) is expected (in October)," the dealer at the public sector bank said. 

 

 

UDAY BONDS

In the secondary market, five Ujwal DISCOM Assurance Yojana bonds worth INR 37.80 million were traded Thursday, according to data on the Reserve Bank of India's Negotiated Dealing System–Order Matching System.

* INR 19.00 million of Punjab's 8.61%, 2030 bond was dealt at 7.4296%

* INR 11.00 million of Tamil Nadu's 8.04%, 2029 bond was dealt at 7.2712%
* INR 3.50 million of Punjab's 8.47%, 2029 bond was dealt at 7.3995%

* INR 2.30 million of Punjab's 8.65%, 2028 bond was dealt at 7.0467%

* INR 2.00 million of Telangana's 7.96%, 2032 bond was dealt at 7.5300%

 

BENCHMARK LEVELS FOR CORPORATE BONDS:

 

Tenure	Thursday	Wednesday
Three-year	7.75–7.80%	7.75-7.78%
Five-year	7.80–7.85%	7.80-7.85%
10-year	7.85%	7.82–7.85%

 

End

 

Edited by Avishek Dutta

 

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