India’s long-tenor sovereign bonds present a buying opportunity, thanks to a wide yield spread over shorter notes, according to a top official at Bajaj Finserv Ltd.
“There’s a reasonable amount of demand, especially for bonds at the longer end,” Lakshmi Iyer, group president for investments at the financial services conglomerate said in an interview with Bloomberg TV. With long yields rising above 7%, the segment is drawing demand from pension funds and insurers, she said.
The yield spread between India’s 30- and five-year government debt has widened to over 100 basis points — nearing a three-year high last seen in June — after the Reserve Bank of India kept interest rates steady last week, citing inflation risks. The move has led some analysts to dial back expectations of near-term rate cuts.
“The gaps are pretty huge,” Iyer said, referring to the spread. “That poses a buying opportunity. I don’t think demand-supply mismatch or lack of demand is clearly a worry for the bond market.” The RBI may deliver one more rate cut before the current fiscal year ends in March 2026, she said.
