India's debt secondary market turned over roughly ₹5.5 lakh crore in the first 18 sessions of June 2026 across corporate bonds, certificates of deposit (CDs) and commercial paper (CP). The story of the month was the unwind of May's squeeze. With the RBI holding the repo at 5.25%, banking-system liquidity refilled and CD yields eased about 60 basis points off their late-May peak to near 7.0%. The high-grade term premium returned, so the front-end inversion we flagged last month has unwound. For corporate treasurers, the easy 7.8% park is fading, but credit spreads barely moved.
This review covers the 18 sessions with data from 1 to 25 June 2026. It is the second edition of The Debt Tape, a monthly read on what India's traded debt market is actually pricing. Last month's edition is here.
The macro backdrop: a hold, and the cash comes back
On 5 June the Monetary Policy Committee held the repo rate at 5.25%, a unanimous decision, and kept its neutral stance, its third straight pause. The committee flagged a clouded global backdrop and inflation running below target with an upward bias. The key point for the traded market: the policy rate did not move, so everything that happened at the front end this month was a liquidity story, not a rate story.
And liquidity came back. The acute deficit that defined May, driven by tax outflows and the central bank's dollar sales to steady the rupee, eased as those flows reversed and cash returned to the banking system. The long end rallied too, but for its own reasons: the 10-year government bond yield fell to roughly 6.8%, a 13-week low, as softer crude eased the inflation worry and foreign investors bought government bonds at their fastest monthly pace in two years. So both ends of the curve drifted lower, the front on liquidity and the long end on demand, neither on a policy move. The front simply fell faster, and that is what re-shaped the curve.
We said it might be temporary
Last month we called the CD squeeze liquidity-driven and wrote that the rich short rates "could normalise once liquidity is replenished." June is the month that tested the call, and the data backs it: short rates eased while the policy rate and credit spreads held. The squeeze was a liquidity event, not a new rate regime. It did not break in a day, and it has not fully gone, but it has clearly let go.
The month in numbers
India debt secondary market · turnover by segment · 1 to 25 June 2026
| Segment | Instruments | Turnover | Median YTM |
|---|---|---|---|
| Corporate bonds | ~1,800 | ₹1,69,025 cr | 10.2% |
| Certificates of Deposit (CD) | ~230 | ₹2,19,215 cr | 7.2% |
| Commercial Paper (CP) | ~140 | ₹1,59,743 cr | 6.4% |
| Total | ~2,170 | ₹5,47,983 cr | — |
Source: NSE and BSE exchange data, 1 to 25 June 2026. Instrument counts are distinct issues traded in the window (approximate).
Turnover ran hotter than May, even with three fewer sessions in the sample: about ₹30,000 crore a day versus roughly ₹25,000 crore in May. That is consistent with liquidity returning, more cash looking for a home means more paper changing hands. Note too that the CD book, near ₹2.2 lakh crore, was the single largest segment this month, edging out corporate bonds. As in May, the median corporate-bond "yield" of 10.2% is a mix artefact, not a rate; the real signals are the rating-segmented curve and the front-end trend.
The front-end release, week by week
The clearest trend of June was the mirror image of May. Where last month CD yields climbed every session, this month they leaked lower as liquidity refilled, settling from a late-May peak near 7.6% to around 7.0% by late June.
That is about 60bp off the peak. It is a normalisation, not a collapse: a top-rated bank CD near 7.0% still sat about 175bp over the 5.25% repo, down from roughly 255bp in May. The premium for parking cash short is shrinking, but it has not disappeared. CP told the same story one notch lower, with median yields holding in the low 6% range.
The term structure: the slope comes back
Hold credit constant and vary tenor. This is where June diverges most sharply from May. Last month the high-grade curve was flat and, at the very front, inverted. This month a AAA investor was paid roughly 7.3% for short paper and closer to 7.9% to lock up for five years, a term premium of about 60 basis points that had all but vanished in May.
| Rating | <6m | 6–12m | 1–2y | 2–3y | 3–5y | 5y+ |
|---|---|---|---|---|---|---|
| AAA | 7.3% | 7.8% | 7.8% | 7.8% | 7.9% | 7.8% |
| AA | 9.4% | 9.2% | 9.2% | 9.2% | 9.3% | 9.3% |
| A | 9.9% | 10.9% | 11.1% | 11.2% | 10.5% | 10.5% |
Late-June snapshot, median traded YTM by rating and residual tenor. AAA is volume-heavy at the short end, where the quasi-sovereigns issue most, so its blended median reads lower than the longer-tenor levels shown here.
With CDs back near 7.0% and short AAA paper around 7.3%, the front end now yields less than a five-year AAA bond. The inversion has unwound. For a cash investor, the signal flipped: in May, staying short was both safer and higher-yielding; in June, extending high grade out the curve started to pay again, even if only modestly.
The credit curve: still ~500bp from AAA to BBB
Now hold tenor roughly constant at the 1 to 2 year point. Here is what did not change. The credit ladder in June looked almost identical to May. AAA corporate paper cleared around 7.45%, while BBB names traded near 12.5%.
That roughly 502bp of credit spread is essentially where it sat last month, around 510bp. So while the front end moved a lot, the price of credit risk held firm. The lesson from May still applies: stepping down one rung buys far more yield than extending maturity. The investment-grade rungs (AAA and AA) are robust; the sub-AA rungs are thinner and noisier, so treat the A and BBB levels as indicative.
Who actually trades: the bond leaderboard
India's traded bond market, stripped down, is the AAA quasi-sovereigns and the large financiers. Here are the top issuers by traded NCD turnover over the rolling 30-day window. The big banks' CDs are a separate book, huge but concentrated in a handful of names; this is the bond tape.
Top issuers by traded NCD turnover · last 30 days
NABARD
AAA development bank · benchmark
SIDBI
AAA development bank
REC
AAA power financier
Bajaj Finance
NBFC
Power Finance Corp
AAA power financier
Bajaj Housing Finance
AAA HFC
Apex Homes
Unrated realty · high-yield
LIC Housing Finance
AAA HFC
Indian Railway Finance Corporation, LIC Housing Finance and Tata Capital each traded a further ₹3,900 to 6,100 cr (AAA), not all shown.
NABARD, SIDBI, REC and Power Finance Corporation are where daily AAA price discovery happens, with Bajaj Finance and the housing financiers rounding out the NBFC and HFC names. If you want to know India's AAA cost of money on any given day, watch these issuers.
The bonds that trade every single session are a narrower, more revealing list. In June it was overwhelmingly AAA: NABARD and SIDBI paper across the curve. The one high-yield name that traded all 21 sessions was Apex Homes, an unrated realty issuer clearing near 14%, with a single large Alaknanda Hydro block adding a 16% print. "Most liquid" and "highest quality" mostly overlapped this month, with a short, loud high-yield tail.
| Issue | Rating (at issue) | Tenor | Turnover | YTM |
|---|---|---|---|---|
| NABARD (7.44% 2029) | AAA | ~3.1y | ₹8,408 cr | ~7.30% |
| Apex Homes (high-yield) | Unrated | ~1.4y | ₹6,188 cr | ~14.0% |
| SIDBI | AAA | <3m | ₹2,730 cr | ~6.85% |
| Alaknanda Hydro (block) | Unrated | 5y+ | ₹2,031 cr | ~16.0% |
| Bajaj Housing Finance | AAA | ~3.5y | ₹1,828 cr | ~7.76% |
| REC | AAA | 5y+ | ₹1,811 cr | ~6.94% |
| Bajaj Finance | AAA | ~1.5y | ₹1,775 cr | ~7.70% |
Turnover over the rolling 30-day window. Ratings shown are the issue-time grade carried in the instrument registry, so they can differ from the latest agency surveillance rating. "Unrated" is unrated.
What it means for corporate treasurers
- The easy short-money park is fading. CDs near 7.0% are still attractive against a 5.25% repo, but the premium has shrunk by roughly 80bp from May's peak. If your mandate allows it, locking an attractive short tenor now is more defensible than waiting for another spike that the liquidity backdrop no longer supports.
- Duration started to pay again. With the term premium back, extending high grade out the curve earns about 60bp from the front to five years, where in May it earned almost nothing. That is not a lot, but the sign flipped, and that is what matters for setting a ladder.
- The yield is still in credit, not tenor. At a fixed tenor, moving AAA to AA to A to BBB added about 500bp, essentially unchanged from May. For mandates that permit it, credit selection remained the dominant return lever.
- Benchmark before you transact. A AA name offered at, say, 9.6% was about 40bp cheap to the AA median near 9.2%. Knowing the rating-cohort clearing level turns a quoted rate into a negotiating position.
Sitting on idle cash this quarter?
Talk to us before you make a data-backed, informed decision. We will show you the live numbers across CDs, high-grade bonds and fixed deposits, where the market is actually clearing today. The decision stays yours.
Chase the short-money story: live FD & yield data
The CD move is the wholesale-market version of a story retail savers see in fixed-deposit rates. When bank funding costs ease, FD rates tend to follow. Compare current FD rates, bank by bank:
For the market-wide view, see the best FD rates in India, track the 10-year G-sec yield, and watch the whole India yield curve. The Debt Tape is the monthly narrative; those pages are the live tape it reads from.
Frequently asked questions
Did certificate of deposit (CD) rates fall in June 2026?
Yes, gently. After May's squeeze drove CD median yields to about 7.6 to 7.8%, the front end eased through June as banking-system liquidity refilled. On a consistent traded-median basis, CD yields ran near 7.4% in early June and around 7.0% by late June, roughly 60 basis points off the peak. With the repo rate at 5.25%, a top-rated bank CD near 7.0% still sat about 175 basis points over the policy rate, down from about 255 basis points in May.
Did the RBI change the repo rate in June 2026?
No. The Monetary Policy Committee held the repo rate at 5.25% on 5 June 2026, a unanimous decision, and kept its neutral stance. So June's front-end easing was a liquidity story, not a policy change. The whole CD move happened with the policy rate pinned exactly where it was in May.
Has the inverted yield curve from May 2026 unwound?
At the front, yes. In May, sub-one-year CDs near 7.8% yielded more than a five-year AAA bond, an inversion. In June, with CDs back near 7.0% and short AAA paper around 7.3% while five-year AAA cleared closer to 7.9%, the term premium returned: short money now yields less than longer high-grade bonds. The high-grade curve has re-steepened toward a normal upward slope.
How much extra yield did stepping down the credit rating buy in June?
About the same as May. At a roughly constant 1 to 2 year tenor, moving from AAA to BBB added around 500 basis points: AAA paper cleared near 7.45%, AA near 9.2%, A near 11.3%, and BBB near 12.5%. The front end moved over the month, but the credit ladder barely did, so credit selection stayed the dominant return lever.
Who are the most-traded issuers in India's bond market?
The traded bond tape is overwhelmingly the AAA quasi-sovereigns and large financiers. NABARD led the rolling 30-day window at about ₹32,022 crore, followed by SIDBI, REC, Bajaj Finance, Power Finance Corporation and Bajaj Housing Finance. The one high-yield name trading every single session was Apex Homes, an unrated realty issuer clearing near 14%.
Disclaimer. This review is informational, a description of what the traded market priced, and is not a quote, a solicitation, or investment advice. Capera is not a registered investment adviser. Yields move daily; confirm live levels before transacting. See Legal & disclosures for jurisdiction-specific regulatory positions.
