The Small Industries Development Bank of India (SIDBI) has withdrawn a planned three-year bond issuance worth Rs 6,000 crore, Reuters reported, citing bankers. The bank stepped back after hardening domestic yields made pricing unfavourable, according to the September 25 report.

The withdrawal reflects broader stress in India's corporate debt market. According to Business Standard and Flash Finance, rising crude prices and climbing bond yields were weighing on markets on September 28, with benchmark Indian government bond yields expected in the 7.05-7.15% range.

The Reserve Bank of India has shifted its stance from accommodative to neutral, ending expectations of further rate cuts. Several issuers, including NABARD and REC, have deferred or trimmed their offerings in recent weeks as funding costs climbed.

The episode signals tighter financing conditions for public-sector issuers in India. More deferrals may follow if yields stay elevated, keeping borrowing costs high across the economy and squeezing companies that depend on bond markets for funding.