Archive · 9 Dec 2025
PFC, SIDBI scrap bond issuances due to higher yields
Two big companies in India, PFC and SIDBI, decided not to sell bonds worth Rs 11,500 crore.
They planned to borrow money by selling these bonds, but the interest rates (called yields) became higher than they expected.
Even though the central bank of India cut rates a bit, the bond market didn't react as hoped.
PFC wanted to raise Rs 3,500 crore but the interest rate was higher than they wanted.
SIDBI wanted to raise Rs 8,000 crore but also faced higher interest rates.
People in the market are not sure if rates will go down further, so they're being careful.
PFC and SIDBI scrapped bond issuances worth Rs 11,500 crore due to higher yields.
PFC planned to raise Rs 3,500 crore with a 15-year bond but the yield was 7.17% instead of the expected 7.10%.
SIDBI planned to raise Rs 8,000 crore with a 3-year and 4-month bond but the yield was 6.86% instead of the expected 6.75%.
The yield on the 10-year benchmark government bond rose 10 basis points since the policy announcement.
Market participants are uncertain about future yield movements and the end of the rate-cut cycle.
- Who
- Power Finance Corporation (PFC) and Small Industries Development Bank of India (SIDBI)
- What
- Scrapped bond issuances worth Rs 11,500 crore due to higher yields
- When
- December 5
- Where
- India
- Why
- Due to hardening of yields despite a 25-bps rate cut by the Reserve Bank of India
- PFC's planned bond issuance
- Rs 3,500 crore
- PFC's expected yield
- 7.10%
- PFC's actual yield
- 7.17%
- SIDBI's planned bond issuance
- Rs 8,000 crore
- SIDBI's expected yield
- 6.75%
- SIDBI's actual yield
- 6.86%
- Total bond issuances scrapped
- Rs 11,500 crore
- Date of bond issuance cancellation
- December 5