Companies return to bond market as yields ease, RBI’s move opens up domestic debt markets

Indian companies and NBFCs are returning to the corporate bond market as AAA-rated five-year yields fell to around 7.4-7.43% from their late-May highs, following the RBI's move to relax external commercial borrowing norms and bear hedging costs for select PSUs, which freed up domestic debt market space for private issuers. Bajaj Finance raised Rs 2,000 crore via a five-year bond at 7.92%, 8 bps lower than its May issue, while Cholamandalam Investment priced a three-year paper at 8.15% versus 8.35% earlier. The benchmark 10-year G-sec yield has eased to 6.77% from a high of 7.13%, with participants expecting gradual rotation of fresh borrowing from bank loans back into bond markets.