Nabfid withdraws 3-year bond sale as bid yields exceed expectations

NaBFID withdrew its maiden three-year bond issue after investors sought higher yields amid hardening G-sec rates and geopolitical tensions that dampened market sentiment and pricing

National Bank for Financing Infrastructure and Development (NaBFID) on Friday withdrew its three-year bond issue after bids were higher than the issuer was willing to accept, said market participants.

 

Market participants said that on the base size of Rs 1,000 crore, bids were received at a yield of around 7.15 per cent. 

“The bids were at around 7.15 per cent, the level they were unwilling to accept. This was because of hardening of G-sec yields as sentiment has dampened in the market because of geo-political tensions,” said a dealer at a state-owned bank. 

Earlier in the week, National Bank for Agriculture and Rural Development (NABARD) raised Rs 6,779 crore through a three-year bond at a cut-off yield of 7.01 per cent.

 

Market participants said that the timing was unfavourable for launching a maiden three-year bond, particularly against the backdrop of heightened geopolitical tensions between the US and Iran. In such an environment, investor appetite tends to weaken and pricing expectations turn more conservative, resulting in higher bid yields.

 

Government bond yields have inched up in the previous few sessions, tracking the rise in US Treasury yields amid muted global risk sentiment. While movements in corporate bonds in secondary market trading may reflect with a lag, bidding levels in primary issuances went up, tracking the hardening of yields in the government bond market.

 

“The issuance might still come to the market but the amount might be less,” said a dealer at another state-owned bank.

 

Last week, major state-owned issuers tapped the market for over Rs 20,000 crore.

 

Fundraising through the corporate bond market has remained relatively subdued in FY26, as elevated yields, driven by persistent geopolitical tensions, have dampened issuer appetite. During the first nine months of 2025–26 (April–December), funds raised through this route declined 6 per cent year-on-year to Rs 6.76 trillion compared with Rs 7.19 trillion in the year-ago period.