India's debt secondary market turned over roughly ₹5.3 lakh crore across 20 sessions in August 2026. The story of the month is a single line on the tape: with the RBI holding the repo at 5.25% and the banking system awash in cash, the cheapest three-month bank money printed below the policy rate on 16 of those 20 sessions. Banks stopped raising deposits and corporates rushed the cheap window, so commercial paper issuance jumped 48% while CD issuance fell 29%. The credit ladder, meanwhile, did not move at all.
This review covers the 20 sessions with data from 3 to 31 August 2026. It is the third edition of The Debt Tape, a monthly read on what India's traded debt market is actually pricing. The previous edition is here.
The macro backdrop: a fourth hold, and too much cash
On 5 August the Monetary Policy Committee held the repo rate at 5.25% and kept its neutral stance, a fourth consecutive pause. The Standing Deposit Facility stayed at 5.00%, and the Marginal Standing Facility and Bank Rate at 5.50%. The decision was widely expected. So, as in June, nothing that happened at the front end this month was a rate story.
What did happen is that the surplus got large enough to matter. Liquidity had been rebuilding since June, and by August banks were holding more cash than they had use for. That shows up in the tape in the most direct way possible: banks lending to each other under the policy rate.
The long end went the other way. The 10-year government bond yield sat near 6.76% in mid-August and climbed to roughly 6.95% by month-end, a twelve-week high, as expectations of tighter policy ahead and firmer oil prices pushed it up. Cash got cheaper and duration got dearer, and those are two different markets responding to two different things.
Bank money went through the policy rate
The repo rate is usually a floor for short bank funding. In August it stopped being one. On 16 of the 20 sessions, the cheapest three-month certificate of deposit on the tape cleared below 5.25%. These are not stray small prints: about ₹34,825 cr of large CD trades across 12 banks went through under the repo, roughly 26.2% of the visible large-trade CD tape. The lowest print of the month was 5.00%.
The amber line is the middle of the bank-money market and it has ground steadily lower, from 7.14% in June to 6.57% in August. The navy line is the cheap end, and it is the one that tells the story: it crosses under the repo in August. The gap between the two lines is also worth reading, because it means the market is no longer pricing all bank paper alike. A median CD at 6.57% still pays about 132bp over the policy rate, so cash is not free; it is just that the strongest banks no longer have to pay up for it.
Large CD trades clearing below the 5.25% repo · June to August 2026
| Month | Sub-repo prints | Banks | Turnover | Share of tape | Sessions |
|---|---|---|---|---|---|
| June | 0 | 0 | — | — | 0 of 21 |
| July | 3 | 2 | ₹2,175 cr | 2.2% | 5 of 23 |
| August | 32 | 12 | ₹34,825 cr | 26.2% | 16 of 20 |
Counted off the daily large-trade tape, so this is the visible block business rather than every CD trade. "Sessions" is the number of sessions whose cheapest three-month CD printed under the repo. Residuals were checked: the largest sub-repo prints carry about 63 days to maturity, so these are genuine two-month CDs, not short-stub artefacts.
The progression is the point. In June this did not happen once. In July it happened at two banks. In August it was twelve banks including HDFC Bank, ICICI Bank, Axis Bank, Bank of Baroda, Canara Bank, Punjab National Bank and IndusInd, in size, on most days. A one-off print is a quirk in the data. A quarter of the large-trade tape is a regime.
The month in numbers
India debt secondary market · turnover by segment · 3 to 31 August 2026
| Segment | Issues / session | Turnover | Median YTM |
|---|---|---|---|
| Corporate bonds | 757 | ₹1,63,242 cr | 10.3% |
| Certificates of Deposit (CD) | 63 | ₹2,50,249 cr | 6.6% |
| Commercial Paper (CP) | 33 | ₹1,14,460 cr | 6.3% |
| Total | 853 | ₹5,27,951 cr | — |
Source: NSE and BSE exchange data, 3 to 31 August 2026, across the 20 sessions with data. "Issues / session" is the average number of distinct instruments that printed per session.
Turnover ran hot: about ₹26,400 crore a session against roughly ₹19,700 crore in July. But the growth was not evenly spread. Corporate bond turnover per session was slightly down on July, while CDs rose about 58% and commercial paper about 76%. Money-market paper is now 69.1% of everything that trades, up from 56.7% in July. As in previous months, the median corporate-bond "yield" of 10.3% is a mix artefact rather than a rate; the real signals are the rating-segmented curve and the front-end trend.
The funding flip: banks stopped borrowing, corporates started
Primary issuance makes the same point from the other side of the trade. Banks that are sitting on surplus cash do not need to raise deposits, and corporates offered money below 7% will take it. Both things happened, in the same month, in opposite directions.
Primary issuance · July vs August 2026
| Segment | June | July | August | Per session | Issues | Avg yield |
|---|---|---|---|---|---|---|
| Certificates of Deposit | ₹1,80,155 cr | ₹95,945 cr | ₹68,130 cr | 8,579 → 4,172 → 3,406 | 148 → 97 → 56 | 6.78% |
| Commercial Paper | ₹2,54,903 cr | ₹1,21,610 cr | ₹1,80,470 cr | 12,138 → 5,287 → 9,023 | 674 → 481 → 597 | 6.98% |
Three months are shown because two would mislead. The three months had 21, 23 and 20 sessions respectively, so the per-session column is the fair comparison. Corporate bond primary issuance is omitted: the underlying issue-size field returned an implausible figure for August, and we would rather leave a row out than publish a number we do not trust.
Read the per-session column, because it is the one that is not distorted by the calendar. CD issuance has fallen in each of the last three months, from ₹8,579 crore a session in June to ₹3,406 crore in August, a drop of about 60%. That is a banking system that has stopped competing for deposits. Commercial paper went the other way in August, rebounding about 71% per session off a quiet July, though it is worth being precise here: at ₹1.80 lakh crore August was still short of June's ₹2.55 lakh crore. So this is a recovery in corporate short-term borrowing, not a record.
What is unambiguous is the divergence. Bank short-term issuance more than halved over the quarter while corporate short-term issuance ended it higher than it started, and the market took about 85bp off three-month commercial paper along the way, from 7.10% in June to 6.25% in August. A corporate borrowing at an average 6.98% is funding well inside where most of them can borrow for a year. That window is the direct consequence of the surplus described above, and it is the most actionable thing in this edition for anyone who funds a business.
The money curve stepped down, and kept its slope
It would be easy to read "CDs below the repo" as a distortion at one point on the curve. It is not. The whole short curve moved down together, and it still slopes upward, which is what a normal money market looks like when cash is simply cheaper.
| Tenor | CD · Jul | CD · Aug | CP · Jul | CP · Aug |
|---|---|---|---|---|
| 0–3m | 6.35% | 6.18% | 6.45% | 6.26% |
| 3–6m | 6.90% | 6.64% | 7.28% | 7.07% |
| 6–12m | 6.96% | 6.81% | 7.45% | 7.36% |
Median traded YTM by residual tenor band, month median of daily medians.
Every band fell, by between 9 and 26 basis points, and the ordering held: three-month money is cheaper than six-month, which is cheaper than one-year. Commercial paper sits above CDs at the longer bands, which is the credit difference between a bank and a corporate showing up exactly where it should.
The term structure: the slope is still there
Hold credit constant and vary tenor. At month-end a AAA investor was paid roughly 6.95% for paper under six months and about 7.6% to lock up beyond five years, a term premium of about 69 basis points. The inversion that defined May 2026 has not come back.
| Rating | <6m | 6–12m | 1–2y | 2–3y | 3–5y | 5y+ |
|---|---|---|---|---|---|---|
| AAA | 7.0% | 7.6% | 7.6% | 7.6% | 7.6% | 7.6% |
| AA | 9.2% | 8.8% | 9.1% | 8.7% | 8.7% | 8.9% |
Month-end snapshot, median traded YTM by residual tenor, keyed on the current agency grade (the same basis as the credit curve below). Only AAA and AA are shown: on that basis the A cells hold one or two instruments and the BBB cells are empty, too thin to read as a level.
The AA row is close to flat across the curve, in the 8.7% to 9.2% range, which says the market is charging for the credit rather than for the time. That is the same message the credit ladder gives below, and it is the recurring lesson of this series.
The credit curve: ~507bp from AAA to BBB, and unmoved
Now hold tenor roughly constant at the 1 to 2 year point. Here is what did not change in a month when a great deal else did. AAA corporate paper cleared around 7.47%, while BBB names traded near 12.54%.
That is 507bp of credit spread against 514bp in July, a move of seven basis points, which is no move at all. The front end fell through the policy rate and the price of credit risk did not notice. Stepping down one rung still buys far more yield than extending maturity. One caveat on comparing further back: the rating cohorts now key off the current agency grade rather than the grade at issue, so this ladder is comparable to July but not to the ladders published in the May and June editions. The investment-grade rungs are robust; the A and BBB rungs are thinner, so treat those levels as indicative.
The ratings tape: 23 up, 10 down
The credit ladder did not move this month, and the rating agencies say the same thing from a different direction. Across August they took 23 upgrade actions against 10 downgrades, touching 21 and 8 issuers respectively. More than two moves up for every one down is a benign credit month, and it fits a spread ladder that sat still: nobody was repricing risk because the agencies were not changing their minds about it.
23
Upgrade actions
21 issuers
10
Downgrade actions
8 issuers
1
Moved to default
Aristo Securities
69
Bonds downgraded
individual ISINs
A word on counting, because the raw feed misleads twice. First, the instrument registry records a rating change per bond, so one agency decision on a large programme lands as dozens of rows: KLM Axiva's 4 August cut alone is 31 bonds. Counted that way August would read as 69 downgrades rather than 10. Second, when an agency drops out of the source file for a day, the headline grade hands over to another agency that happens to disagree, and that handover can look like a move when nobody moved. Everything below is counted per agency against itself, and the way a credit desk would count it: one issuer, one agency, one notch, one action.
Every downgrade · India corporate debt · August 2026
| Issuer | Move | Agency | Bonds | Date |
|---|---|---|---|---|
| KAKLM Axiva Finvest | BBB↓BBB- | Acuite | 31 | 04 Aug |
| KAKLM Axiva Finvest | BBB-↓BB+ | India Ratings | 11 | 12 Aug |
| KAKLM Axiva Finvest | BBB-↓BB+ | CARE | 8 | 01 Aug |
| SRShree Renuka Sugars | A↓A- | India Ratings | 5 | 26 Aug |
| WAWestern Capital Advisors | A-↓BBB+ | Acuite | 4 | 13 Aug |
| TCThirumalai Chemicals | BBB+↓BBB | ICRA | 3 | 15 Aug |
 Satya MicroCapital | BB↓B+ | CRISIL | 3 | 22 Aug |
| ASAristo Securities | BB+↓D | Infomerics | 2 | 11 Aug |
 Best Capital Services | BBB↓C | Infomerics | 1 | 22 Aug |
| GNGACL-NALCO Alkalies & Chemicals | AA↓AA- | CARE | 1 | 08 Aug |
The complete list, not a selection: every downward action in the month fits in one table. "Bonds" is the number of individual ISINs covered. Where two agencies moved the same issuer, each gets its own row, because they are two independent opinions.
Three things stand out. KLM Axiva Finvest was cut by three different agencies inside one month, from BBB down to BB+, which is the clearest single deterioration on the tape and the only issuer to appear three times in that table. Aristo Securities went from BB+ straight to D, the month's only move into default, and Best Capital Services fell from BBB to C. Everything else was a single notch.
Note how little of this touched paper that actually trades. Not one of the 10 downgrades was in an issuer whose bonds printed in August. The downgrade tape and the liquid tape are largely different universes, which is worth holding onto before reading either as a market-wide signal.
Largest upgrades by programme size · August 2026
| Issuer | Move | Agency | Bonds | Date |
|---|---|---|---|---|
 Sammaan Capitaltraded | AA+↑AAA | Brickwork | 27 | 27 Aug |
 Capri Global Capitaltraded | AA↑AA+ | Infomerics | 21 | 20 Aug |
| CCChemmanur Credits and Investments | BBB-↑BBB | India Ratings | 7 | 19 Aug |
 KrazyBee Services | A↑A+ | CARE | 5 | 21 Aug |
| JSJSW Steel | AA↑AA+ | ICRA | 5 | 01 Aug |
 Yes Banktraded | AA-↑AA+ | CRISIL | 5 | 06 Aug |
 Sammaan Finservetraded | AA+↑AAA | Brickwork | 4 | 27 Aug |
| Yes Banktraded | AA-↑AA+ | India Ratings | 4 | 18 Aug |
 Namdev Finvest | BBB+↑A- | CARE | 3 | 15 Aug |
 Indian Overseas Banktraded | AA↑AA+ | CARE | 3 | 01 Aug |
The ten largest of 23 upgrade actions, by number of bonds covered.
The upgrade side is led by Sammaan Capital reaching AAA across 27 bonds, with its Sammaan Finserve arm following the same day, and by Capri Global moving to AA+. Below them sits a cluster of AA to AA+ and A to A+ moves at Yes Bank, JSW Steel, Indian Overseas Bank and KrazyBee. That band is where most of the month's upward movement sat, which fits the 507bp ladder holding: the moves were real, but they were mostly one notch and none of them re-rated a whole cohort. Unlike the downgrades, several of these names do trade.
One caveat we would rather state than bury. Daily rating-change tracking began in July 2026, so August is the first complete month of it. That is why this is a snapshot of a month and not a trend, and why there is no ratings migration matrix here: we do not yet have the history to build one honestly. First-time grades are excluded throughout, because a grade appearing on newly-tracked paper is a coverage event rather than a credit event.
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
REC
AAA power financier
SIDBI
AAA development bank
Bajaj Finance
NBFC
Power Finance Corp
AAA power financier
Indian Railway Finance Corp
AAA rail financier
Bajaj Housing Finance
AAA HFC
LIC Housing Finance
AAA HFC
Muthoot Finance, Adani Airport Holdings, Apex Homes and State Bank of India each traded a further ₹2,400 to 3,300 cr, not all shown.
NABARD still leads, though at ₹20,536 crore it is well off the pace it set earlier in the summer, and REC has closed most of the gap. Together with SIDBI and Power Finance Corporation, these are where daily AAA price discovery happens. 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 and more revealing list. In this window exactly two did, and they sit at opposite ends of the credit ladder: an Adani Airport Holdings 2029 issue, clearing near 8.69%, which was also the busiest bond on the whole tape by trade count, and an unrated Apex Homes issue clearing near 14%. Alongside them sat an unrated Eqyizen Investment line printing near 19%. Liquidity and quality overlap at the top of this list, but the high-yield tail is persistent and it is not small.
| Issue | Rating (current) | Tenor | Sessions | Turnover | YTM |
|---|---|---|---|---|---|
| NABARD (7.44% 2029) | AAA | ~2.9y | 16 of 21 | ₹3,875 cr | ~7.70% |
| NABARD (7.48% 2028) | AAA | ~2.0y | 15 of 21 | ₹3,505 cr | ~7.66% |
| Adani Airport Holdings (8.45% 2029) | AA- | ~2.4y | 21 of 21 | ₹2,653 cr | ~8.69% |
| Apex Homes (high-yield) | Unrated | ~1.2y | 21 of 21 | ₹2,487 cr | ~14.0% |
| REC (7.28% 2029) | AAA | ~3.0y | 7 of 21 | ₹1,896 cr | ~7.66% |
| Eqyizen Investment | Unrated | ~2.9y | 8 of 21 | ₹1,886 cr | ~18.95% |
| State Bank of India (perpetual) | AA+ | 5y+ | 13 of 21 | ₹1,650 cr | ~7.90% |
Turnover over the rolling 30-day window to 1 September. Ratings are the CURRENT agency grade, verified issue by issue, not the grade at issue. "Unrated" means no agency carries a live grade on that paper, which is a fact about the issue rather than a judgement about the issuer.
What it means for corporate treasurers
- Borrowing short is as cheap as it has been. Corporates issued three-month commercial paper at an average 6.98% in August, and 597 issues suggests plenty of company. If you have working-capital needs to fund in the next two quarters, this is the window: the market has taken about 85bp off three-month commercial paper since June, which is real money on a large programme.
- Parking cash pays less every month. The median CD has gone 7.14% to 6.84% to 6.57% across three months, and the cheap end is now under the policy rate. The strategy of rolling short and waiting for a better rate has cost money three months running. If your mandate allows a longer tenor, the case for using it is stronger than it was in June.
- Do not read the sub-repo prints as your rate. Those levels are the largest banks placing surplus cash with each other in size. A corporate depositor is not being offered 5.1%, and should be benchmarking against the 6.57% median instead. The gap between the two lines on the chart above is exactly the gap between the interbank market and you.
- The yield is still in credit, not tenor. At a fixed tenor, moving AAA to AA to A to BBB added about 507bp, essentially unchanged from July. Extending a high-grade AAA position from the front to five years earned about 69bp. For mandates that permit it, credit selection remains the dominant return lever by a wide margin.
- Benchmark before you transact. An AA name offered at, say, 9.5% was about 50bp cheap to the AA median near 9.0%. Knowing the rating-cohort clearing level turns a quoted rate into a negotiating position.
Funding a quarter, or parking a surplus?
Talk to us before you make a data-backed, informed decision. We will show you the live numbers across CDs, commercial paper, high-grade bonds and fixed deposits, where the market is actually clearing today. The decision stays yours.
Chase the cheap-money story: live FD & yield data
When wholesale bank funding gets this cheap, retail deposit rates tend to follow it down. The banks placing sub-repo money in the interbank market are the same banks setting the fixed-deposit rates on their retail counters. 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
Why did bank CD rates fall below the RBI repo rate in August 2026?
Because the banking system was running a cash surplus. When banks hold more cash than they can lend or need to fund, they will place it with each other at whatever the market clears, and that can be under the policy rate. In August 2026 the cheapest three-month bank certificate of deposit printed below the 5.25% repo on 16 of the 20 sessions with data, against 5 of 23 in July and none at all in June. About ₹34,825 crore of large CD trades across 12 banks cleared below the repo, roughly 26% of the visible large-trade CD tape. The lowest print of the month was 5.00%.
Did the RBI change the repo rate in August 2026?
No. The Monetary Policy Committee held the repo rate at 5.25% on 5 August 2026 and kept its neutral stance, a fourth consecutive pause. The Standing Deposit Facility stayed at 5.00% and the Marginal Standing Facility and Bank Rate at 5.50%. So everything that happened at the front end in August was a liquidity story, not a policy change.
What were CD and commercial paper rates in India in August 2026?
The median traded certificate of deposit yield was about 6.57%, down from 6.84% in July and 7.14% in June. By tenor, CDs cleared near 6.18% for 0 to 3 months, 6.64% for 3 to 6 months and 6.81% for 6 to 12 months. Commercial paper ran a little higher at the longer bands: about 6.26% for 0 to 3 months, 7.07% for 3 to 6 months and 7.36% for 6 to 12 months. The whole short curve stepped down from July and it still slopes upward, so this was cash getting cheaper rather than a fresh inversion.
Why did commercial paper issuance jump in August 2026?
Because short money was cheap and corporates took the window. Commercial paper issuance rose about 48% month on month to roughly ₹1.80 lakh crore across 597 issues, up from ₹1.22 lakh crore across 481 issues in July. It is a rebound rather than a record, though: June was heavier still at about ₹2.55 lakh crore. Certificate of deposit issuance went the other way and kept going, falling about 29% to ₹68,130 crore across 56 issues, and on a per-session basis it is down roughly 60% since June, because banks sitting on surplus cash did not need to raise deposits. That split, corporate short-term borrowing recovering while bank short-term borrowing keeps shrinking, is the clearest signal of a system with too much cash in it.
How much extra yield did stepping down the credit rating buy in August 2026?
About 507 basis points from AAA to BBB, essentially unchanged from roughly 514 basis points in July. At a broadly 1 to 2 year tenor, AAA paper cleared near 7.47%, AA near 9.01%, A near 10.75% and BBB near 12.54%. The front end moved a lot over the month and the credit ladder barely moved at all, so credit selection stayed the dominant return lever rather than tenor.
Which corporate bonds traded most in India in August 2026?
NABARD led the rolling 30-day window at about ₹20,536 crore, followed by REC at ₹14,587 crore and SIDBI at ₹11,472 crore, with Bajaj Finance, Power Finance Corporation and Indian Railway Finance Corporation behind them. Only two individual bonds printed on all 21 sessions in the window, and they sat at opposite ends of the credit ladder: an Adani Airport Holdings 2029 issue clearing near 8.69%, which was also the busiest bond on the tape by trade count and an unrated Apex Homes issue 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.
