More Stories

Informist, Monday, Oct. 5, 2026

 

By Vaishali Tyagi 

 

NEW DELHI – Corporate bond yields ended largely unchanged Monday as traders remained cautious ahead of the Reserve Bank of India's Monetary Policy Committee decision on Wednesday, dealers said. "Whatever churning happened today was to cover short bets from Friday, with some buying that pushed yields 1-2 basis points lower at the start of the day before they ended steady," said a dealer at a brokerage. "Also, people are being cautious about taking fresh bets due to the RBI monetary policy outcome later this week, so things are being monitored closely."

 

Dealers said an intraday rise in crude oil prices pushed government bond yields marginally higher toward market close amid fears of an escalation in West Asia, while a rise in US Treasury yields also dampened market sentiment. Uncertainty around the US-Iran war has kept crude prices volatile and made investors cautious about taking large fresh positions, with multiple domestic and global factors at play and developments changing rapidly, they said. 

 

"Corporate bonds are seeing a ripple effect from government bond yields... whatever cues the g-sec (government securities) market is tracking, the same effect is transmitted to corporate bonds, as investors trade on spreads,"  the dealer said. "If g-sec yields rise and the spread between g-secs and corporate bonds contracts, sellers raise their ask in corporate bonds to maintain that spread," a dealer at another brokerage firm said. 

 

The yield on three-year bonds issued by the National Bank for Agriculture and Rural Development was 7.87-7.89% Monday, against 7.89-7.91% Thursday, while the indicative yield on NABARD's five-year bonds was 7.89-7.91%, similar to 7.87-7.89% Thursday. The yield on the 10-year NABARD bond was at 7.92% Monday. The benchmark 10-year 6.94%, 2036 bond ended at 7.2108% yield, marginally down from the previous close of 7.2133% on Thursday. Thursday's closing yield level was the highest since April 2024.

 

In the secondary market, deals worth INR 175.82 billion were recorded on the National Stock Exchange and BSE combined, against INR 111.79 billion on Thursday. Papers issued by State Bank of India, REC, Muthoot Fincorp, Nabkisan Finance, Piramal Finance, Tata Capital, Telangana State Industrial Infrastructure Corp., Tata Capital Housing Finance, and Bajaj Finance traded actively. 

 

Dealers said market participants stayed on the sidelines as sentiment remained highly volatile, with the outlook shifting sharply on developments in the US-Iran conflict. 

 

In line with the usual trend, mutual funds were active at the shorter end of the curve, trading in small quantities. Banks deployed excess funds in the 3-5 year segment, while insurers and pension funds largely stayed on the sidelines, dealers said. Mutual funds were offloading bonds to create space for higher-yielding instruments after the MPC meeting, dealers said. Market participants are expecting the MPC to hike the repo rate on Oct. 7.

 

In the primary market, activity has been subdued ahead of the RBI policy meeting, dealers said. Even though a rate hike has largely been priced in, traders are awaiting clarity and will closely watch the RBI governor's commentary for cues on the future trajectory of inflation, GDP and liquidity management

 

Corporate bond supply was INR 9.90 billion on Monday, down from INR 34.15 billion on Thursday. On Monday, Aadhyan Residences, Belstar Microfinance and Credila Financial Services tapped the bond market to raise funds, though deals were not confirmed at the time of writing. On Tuesday, issuances worth INR 27.95 billion are scheduled to hit the corporate debt market, well below recent primary market volumes. Both the overall quantum and the number of bonds are substantially lower compared to the previous few sessions. Bajaj Housing Finance plans to raise up to INR 30 billion through August 2036 bonds, while Muthoot Fincorp has invited bids to raise up to INR 2 billion through Sept 2028 bonds. OPG Power Generation will also tap the market to raise funds. 

 

Further, STCI Primary Dealer said in a note that the RBI MPC outcome will be key, as a 25-bps hike could lift yields to 7.30%-7.31%, a 50-bps hike to 7.39%-7.40%, while no hike could pull yields back to 7.05%-7.06%. This uncertainty is spilling over into corporate bond yields, as higher G-sec (government securities) yields push up corporate bond yields as traders seek to maintain spread levels.   More

 

BENCHMARK LEVELS FOR CORPORATE BONDS:

 

Tenure	Monday	Thursday
Three-year	7.87-7.89%	7.89-7.91%
Five-year	7.89-7.91%	7.87-7.89%
10-year	7.92%	7.94%

 

UDAY BONDS
In the secondary market, no Ujwal DISCOM Assurance Yojana bond was traded on Monday, according to data on the Reserve Bank of India's Negotiated Dealing System–Order Matching System.   End

 

Edited by Saji George Titus

 

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 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.