IOCL Pulls 5-Year Bond Plan Amid High Yield Expectations

Indian Oil Corporation Limited (IOCL), one of India's leading oil-marketing companies, decided to pull back from its planned 5-year bond issuance on Wednesday. The move comes in the wake of a reversal in bond market momentum and yield expectations that did not align with the company’s pricing goals. As per a news report, Indian Oil Corporation Limited chose not to proceed due to the yields being higher than anticipated.

IOCL Withdraws Despite Strong Demand

IOCL had the option to retain ₹3,000 crore from a total bid book of ₹9,800 crore at a yield of 6.51%, but the company has chosen to withdraw its ₹3,000 crore 5-year bond issuance due to higher-than-expected yields. The company was expecting lower rates following an initial rally in short-term bonds after the monetary policy review.

REC Taps Market Successfully as Short-Term Bonds Outperform

While IOCL held back, REC successfully raised ₹3,000 crore through a 21-month bond at a cutoff yield of 6.37% and an additional ₹1,922.50 crore via a four-year bond at 6.70%.

The short end of the yield curve, especially bonds up to 5 years, saw the most traction post-policy, benefiting from lower funding costs. These instruments are particularly favoured for interest income rather than capital appreciation. On Friday, the yield on 3-year and 5-year government bonds fell by 5 basis points each but reversed gains on Monday as traders booked profits.

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IOC Share Price Performance 

As of June 12, 2025, at 10:50 AM, Indian Oil Corporation share price is trading at ₹143.12 per share, reflecting a decline of 1.40% from the previous closing price. Over the past month, the stock has surged by 0.54%.

Conclusion

IOCL’s decision to withdraw despite strong investor interest underlines the company’s pricing discipline in a volatile yield environment. Meanwhile, peers like REC capitalised on the current market to secure funds, highlighting diverging strategies in response to shifting bond market conditions.

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