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Informist, Thursday, Oct. 1, 2026

 

By Vaishali Tyagi

 

NEW DELHI – Corporate bond yields rose on Thursday ahead of the long weekend, tracking a rise in crude oil prices and government bond yields as traders churned positions amid uncertainty, dealers said. The rise in oil prices was triggered by reports of three oil tankers being struck in the Strait of Hormuz, dealers said. Traders will closely track developments in West Asia for further cues on Brent crude and bond prices. India's financial markets will be shut Friday for Gandhi Jayanti. 

 

Dealers said that uncertainty around US-Iran talks have kept crude oil prices volatile and made investors cautious about taking fresh positions. Multiple domestic and global factors are playing out these days and developments are happening rapidly, market participants are being highly calculative before making any moves.

"Corporate bonds are seeing a ripple effect from government bond yields....and, the oil impact has played out well for now, so people are closely tracking global developments for further cues," a dealer at a brokeragre from said. On the domestic front too, the RBI (Reserve Bank of India) monetary policy meeting is due next week, so things are being monitored closely."

 

Dealers said yields may rise further if an escalation in the US-Iran war continues to push crude prices higher and the geopolitical environment remains uncertain, prompting traders to book profits at every opportunity in such a volatile market.

The yield on three-year bonds issued by the National Bank for Agriculture and Rural Development was 7.89-7.91% Thursday, against 7.88-7.90% Wednesday, while the indicative yield on NABARD's five-year bonds was 7.87-7.89%, similar to 7.85-7.87% Wednesday. The yield on the 10-year NABARD bond was at 7.94% Thursday. The benchmark 10-year 6.94%, 2036 bond ended at 7.2133% yield, compared with its previous close of 7.1879% Wednesday. The yield on the 10-year benchmark bond ended at its highest closing level since Apr. 19, 2024, and moved between 7.18% and 7.23% during the day.

 

In the secondary market, overall deals worth INR 111.79 billion were recorded on the National Stock Exchange and BSE combined, against INR 135.91 billion on Wednesday. Papers issued by Godrej Finance, Poonawalla Fincorp, Kerala Infrastructure Investment Fund Board, Asirvad Micro Finance, Indel Money, Shri Ram Finance corp, IIFL Samasta Finance, IIFL Samasta Finance, and SMC Global Securities were actively traded. 

 

On the fall in volume, dealers said market participants were on the sidelines as sentiment remains highly volatile, with things changing drastically on any report about escalation in the US-Iran war, with both sides threatening attacks. 

 

Dealers said mutual funds were active at the shorter end of the curve, trading in small quantum and selling in larger quantum, while banks traded on both sides in the 3-5 year segment and insurance companies were seen selling in the longer tenor segment. Mutual funds are offloading bonds to create space in their portfolios for higher-yielding instruments after the MPC meeting and also due to month-end redemption pressures, dealers said. With the RBI MPC outcome due on Oct. 7, market participants are anticipating a rate hike in October.

 

In the primary market, dealers said activity has thinned ahead of the RBI policy meeting. Even though a rate hike has largely been priced in, traders are awaiting clarity on the decision 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 at INR 34.15 billion Thursday, down over 76% from INR 145.29 billion Wednesday. On Thursday, Jio Credit Ltd., a wholly-owned subsidiary of Jio Financial Services Ltd., raised INR 26.17 billion through the issuance of two bonds. Other issuers included Lendingkart Finance, Si Creva Capital Services, and JM Financial Home Loans, though deals were not confirmed till the time of writing this report. 

 

On Monday, issuances worth INR 9.90 billion are scheduled to hit the corporate debt market, significantly lower than the recent primary market volumes, which exceeded INR 100 billion on most days. Both the overall quantum and the number of bonds are substantially lower compared to the previous few sessions. Belstar Microfinance plans to raise up to INR 2 billion through two bonds, while Aadhyan Residences has invited bids to raise up to INR 1.40 billion through Sept 2030 bonds. 

 

Going ahead, dealers reiterated that issuances by non-banking financial companies and banks are expected to rise to meet capital requirements and fund disbursements, as credit demand is likely to pick up in October ahead of the festive season. 

 

BENCHMARK LEVELS FOR CORPORATE BONDS:

 

Tenure	Thursday	Wednesday
Three-year	7.89-7.91%	7.88-7.90%
Five-year	7.87-7.89%	7.86-7.88%
10-year	7.94%	7.92%

 

UDAY BONDS
In the secondary market, two Ujwal DISCOM Assurance Yojana bond worth INR 2.00 million was traded on Thursday, according to data on the Reserve Bank of India's Negotiated Dealing System–Order Matching System.

 

* INR 1.50 of Tamil Nadu's 8.04%, 2029 bond was dealt at 7.2317%

* INR 0.50 of Uttar Pradesh's 8.77%, 2031 bond was dealt at 7.2451%

 

End

 

Edited by Avishek Dutta

 

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