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Informist, Friday, Sept. 11, 2026

 

By Nandini Sinha

 

MUMBAI – Yields on corporate bonds ended higher Friday as Brent crude oil prices neared the $110 per-barrel mark amid concerns about disruption in energy supply, dealers said. The rise in Indian government bond yields also had an impact on corporate bonds.

 

"In the morning, yields rose 7–8 bps (basis points) in the two-to-five-year segment and around 4 bps in the long segment," a dealer at a brokerage said. "Mutual funds started selling majorly in the 2027 segment as soon as the market opened." Dealers speculated that a foreign institutional investor sold a chunk of bonds maturing in 2029.

 

"In the March-April 2027 segment levels were up 15–20 bps today (Friday)," a dealer at a state-owned bank said. (In paper maturing in less than) three months, there wasn't much movement."

 

Mutual funds and banks were the most active participants in the secondary market, with major trades dealt in the 2027 and 2029 segments, dealers said. At the REC bond auction in the primary market, dealers speculated that pension funds and insurance companies might have bought the state-owned financier's 10-year paper. REC raised INR 40 billion through bonds maturing on Sept. 30, 2036, at a coupon of 7.73%. 

 

It raised INR 30 billion through five-year bonds maturing on Sept. 30, 2031, at 7.67%. "The issue has a two-year put option. So, the bonds are priced that way... the full amount got accepted," the dealer at the public-sector bank said. Mutual funds and banks are expected to have bought REC's five-year paper, dealers said.

 

The yield on three-year bonds issued by the National Bank for Agriculture and Rural Development was 7.70-7.75%, up from 7.65% Thursday, while the indicative yield on NABARD's five-year bonds rose 5 basis points to 7.75-7.80% from 7.70-7.75% Thursday. The indicative yield on NABARD's 10-year bonds also rose 5 bps to 7.80–7.85% from 7.75–7.80% Thursday. 

 

The yield on the 10-year benchmark Indian government bond settled at 7.02% Friday, up from 6.98% Thursday. At 1801 IST, Brent crude oil futures for November delivery were at $104.02 per barrel, down from $109.97 a barrel in early trade.

 

In the secondary market, deals worth INR 92.59 billion were recorded on the National Stock Exchange and BSE combined, up from INR 90.92 billion Thursday. Bonds issued by Bharti Telecom, REC, Bajaj Finance, Muthoot Fincorp, IIFL Finance, and Power Finance Corp. were traded actively.

 

Volumes fell from Thursday as of 1500 IST but picked up towards the end of trading hours to end slightly higher than the previous day. Secondary market volumes also remained low as traders remained cautious ahead of the release of US inflation data and avoided taking positions ahead of the long weekend. Indian financial markets will be shut Monday for Ganesh Chaturthi.

 

Market participants will track the movement in crude oil prices and developments in the US-Iran war before taking positions Tuesday. They also await India's CPI inflation data for August, due Monday. Retail inflation is expected to be 4.8% in August, according to the average of estimates in an Informist Poll.

 

Primary market activity is seen picking up Tuesday, with bonds worth INR 209.60 billion slated to be issued. Reliance Industries will tap the market to raise up to INR 125 billion through the issuance of five-year bonds at a fixed coupon of 7.47%, dealers said. The issue has a base size of INR 100 billion and a greenshoe option of INR 25 billion. 

 

LIC Housing Finance will seek bids for up to INR 35 billion by issuing three-year bonds. Poonawalla Fincorp will seek to raise up to INR 20 billion through the issuance of two bonds with different maturities while NIIF Infrastructure Finance plans to raise up to INR 15 billion through the issuance of bonds maturing in November 2031. 

 

Motilal Oswal Financial Services plans to raise up to INR 5.6 billion through the issuance of five-year bonds, while Keertana Finserv will seek to raise up to INR 5 billion through the issuance of bonds maturing in December 2028. Navi Finserv has sought bids for three bonds with different maturities to raise INR 2.75 billion while Edelweiss Asset Reconstruction Co. plans to raise INR 1.25 billion through the reissue of zero-coupon bonds maturing on Oct. 6, 2029.

 

UDAY BONDS

In the secondary market, two Ujwal DISCOM Assurance Yojana bonds worth INR 14.50 million were traded Friday, according to data on the Reserve Bank of India's Negotiated Dealing System–Order Matching System.

* INR 12.00 million of Uttar Pradesh's 8.77%, 2031 bond was dealt at 7.2180%
* INR 2.50 million of Uttar Pradesh's 8.35%, 2029 bond was dealt at 7.1805%
 

BENCHMARK LEVELS FOR CORPORATE BONDS:

 

Tenure	Friday	Thursday
Three-year	7.70-7.75%	7.65%
Five-year	7.75-7.80%	7.70-7.75%
10-year	7.80–7.85%	7.75-7.80%

 

End

 

US$1 = INR 95.5500

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

 

Edited by Rajeev Pai

 

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