Indian state-run companies, including THDC India, NHPC, India Infrastructure Finance, and Indian Renewable Energy Development Agency, are set to raise around Rs 50 billion ($595.61 million) through long-term bonds in the next two weeks. This move takes advantage of falling government bond yields and limited state debt supply, creating strong investor demand.
With India’s 10-year bond yield at around 6.85% and 15-year yield at 6.90%, insurance companies are keen to invest in highly rated, long-duration bonds. Companies are capitalizing on this favourable environment to meet their funding needs.
The drop in yields reflects expectations of rate cuts by the Federal Reserve and potentially by the Reserve Bank of India later this year. Investors are looking to lock in returns now, as longer-duration bonds offer better profit opportunities in a falling interest rate environment.