The 2 state-owned financial institutions, the National Bank for Agriculture and Rural Development (Nabard) and REC Ltd, withdrew planned bond issuances worth a combined ₹11,000 crore on Thursday after receiving limited bids from investors.
News reports indicated that the bids submitted were at yields higher than what the issuers were prepared to accept. As a result, both institutions decided to cancel the proposed borrowings rather than proceed at the quoted rates.
Nabard had intended to raise ₹8,000 crore through bonds with a maturity of 7 years and 3 months. Bids received during the process indicated yields of about 7.37% for the base amount and nearly 7.57% for the full issue size. The pricing was considered unfavourable, leading the institution to withdraw the offering.
Following the cancellation, Nabard is exploring shorter-tenor borrowings where investor participation is currently stronger.
REC had planned a ₹3,000 crore bond issue with a tenure of 2 years, which was also withdrawn due to weak demand.
However, the company proceeded with a separate fundraising exercise and raised ₹3,000 crore through 5-year bonds. The bonds were issued at a coupon rate of 7.19%.
Earlier in March, another state-owned lender also withdrew a bond issue.
On March 4, the Small Industries Development Bank of India (Sidbi) cancelled its proposed ₹8,000 crore bond sale after facing similar market conditions. This added to signs of subdued activity in the primary debt market.
Nabard is expected to return to the bond market on March 16 with another attempt to raise ₹8,000 crore. The new issue is likely to carry a shorter maturity of 3 years.
On the same day, the Export-Import Bank of India (Exim Bank) plans to raise ₹4,000 crore through bonds with a 5-year tenure.
Market participants indicate that bond market activity has remained selective in recent weeks.
Issuers with longer-tenor securities have been able to attract investors where long-term funds have capital available for deployment. However, borrowers without strong investor interest are finding it difficult to secure funds at favourable rates.
Short-term bond segments have also seen volatility amid global uncertainties, including geopolitical developments linked to Iran.
Read More: ED Attaches ₹581 Crore Properties Linked to Anil Ambani Group; Total Seizures Reach ₹16,310 Crore!
As of March 13, 2026, 2:32 pm, REC Limited share price was trading at ₹333.40, a 2.94% decrease from the previous closing price.
The withdrawal of multiple bond issues in recent weeks shows cautious conditions in the primary debt market. Issuers continue to adjust borrowing plans as they respond to investor demand and prevailing yield expectations.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Mar 13, 2026, 2:51 PM IST
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