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Informist, Monday, Jun. 15, 2026

 

By Vaishali Tyagi

 

NEW DELHI – Yields on corporate bonds ended flat across tenures as an early decline in rates was offset by profit-booking, dealers said. Yields moved marginally lower during the day after Brent crude eased following the announcement of a peace agreement between the US and Iran, which lifted sentiment and triggered purchases. However, a few traders sold into the rally to book profits, which left yields broadly unchanged by close, they said. "Yields have ended flattish, and most of the tenures have come back to the previous day's levels after moving lower earlier today (Monday) due to profit booking," a dealer at a brokerage firm said.

 

Market participants said the rally gained momentum last week after the Reserve Bank of India's measures to boost foreign capital inflows lifted sentiment and pushed yields down by 25-30 basis points. Easing tensions between the US and Iran further improved investor appetite, helping pull yields down during the day. 

 

The yield on three-year bonds issued by the National Bank for Agriculture and Rural Development was 7.35-7.37%, largely unchanged from Friday's 7.34-7.36%, while the yields on NABARD's five-year bonds were 7.37-7.39%, broadly steady from 7.36-7.37% Friday. The indicative yields on NABARD's 10-year bonds were at 7.55-7.58%. 

 

A dealer at a state-owned financial development institution said sentiment has turned sharply positive since last week. "After yields dropped 20-30 basis points last week after RBI's measures, buying interest has picked up in the secondary market, and the primary market is also now seeing heavy supply compared to two weeks ago when issuance was scarce," the dealer at the institution said. "Correction in yields has prompted investors to lock in bonds wherever opportunities arise, in both primary and secondary markets."

 

Participants across segments were active in the market, dealers said. Foreign portfolio investors such as Morgan Stanley India and Standard Chartered Bank, along with banks and insurance companies, were present in the secondary market, buying corporate bonds, they said. Dealers said most trading activity was seen in bonds maturing up to three years. Mutual funds, banks, FPIs, and insurance companies bought bonds, and a handful of banks and mutual funds were also seen selling towards the close. 

 

In the primary market, many corporate bond issuances will hit the market on Tuesday, with major public sector undertakings lining up deals after yields dropped sharply. Dealers said issuers are active in the domestic market, but some of these state-owned entities are also set to raise funds in overseas markets soon. 

 

State-owned entities are set to raise around INR 130 billion. Small Industries Development Bank of India plans to raise up to INR 60 billion through five-year bonds maturing Jun. 18, 2031. REC plans to borrow up to INR 40 billion via bonds maturing Jul. 1, 2036, while Housing and Urban Development Corp. plans to raise up to INR 30 billion through bonds maturing Jul. 18, 2029. In addition, NIIF Infrastructure Finance plans to raise up to INR 5 billion by issuing bonds maturing on Aug. 21, 2029, and Ans will raise INR 800 million via zero-coupon bonds. 

 

Market participants expect the SIDBI's bond issue to be priced at 7.40-7.45%, while REC's bond is likely to see yields around 7.50%. 

 

In the secondary market, overall deals worth INR 99.82 billion were recorded on the National Stock Exchange and BSE combined Friday, down from INR 153.56 billion Friday. Papers issued by The Andhra Pradesh Mineral Development Corp., Kerala Infrastructure Investment Fund Board, Hyderabad Metropolitan Development Authority, Bajaj Housing Finance, and Adani Airport Holdings were actively traded. 

 

Market participants expect issuance activity to pick up and sentiment to remain buoyant going forward, after the US and Iran reached a preliminary settlement to end the conflict and reopen the Strait of Hormuz. "We see yields to fall at least 5-10 bps more across segments if the environment in markets remains positive and no negative news comes out of the US-Iran war," the dealer quoted above said. 

 

UDAY BONDS

In the secondary market, one Ujwal DISCOM Assurance Yojana bond worth INR 10.00 million was traded Monday, according to data on the RBI's Negotiated Dealing System-Order Matching System.

* INR 10 million of Uttar Pradesh's 8.71%, 2028 bond was dealt at 6.6907%

 

BENCHMARK LEVELS FOR CORPORATE BONDS: 

 

Tenure	Monday	Friday
Three-year	7.35-7.37	7.34-7.36%
Five-year	7.37-7.39%	7.36-7.37%
10-year	7.55-7.58%.	--

 

End

 

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

 

Edited by Saji George Titus

 

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