The Indian corporate bond market has been in an upward trajectory, recording a healthy 13.42% year-on-year (YoY) growth in FY24-25. As per SEBI data, the market stood at ₹47.29 lakh crore ($ 567 billion) at the end of FY23-24, as against ₹53.63 lakh crore as of FY24-25, reflecting deepening participation amid evolving macroeconomic conditions.
Like bonds issued by the government, corporate bonds are debt securities issued by a company or a corporation to raise funds from the market to meet various needs. Since these bonds are riskier than government bonds, they carry a higher return.
Breakdown of Corporate Bond Market
A breakdown of the corporate bond market shows significant participation from the private sector players. According to data shared by India Bonds, barring non-bank and non-PSU segments, the private sector accounted for 45.12% of the entire corporate bond market. Meanwhile, the non-banking financial companies (NBFCs) — both public and private — comprised 29% of total outstanding bonds, the data showed.
The financial sector as a whole, including banks, NBFCs, and housing finance companies (HFCs), comprised 51% of the outstanding corporate bond market. The non-financial sector, excluding the companies operating in the above-mentioned sector, accounted for the remaining 49%, reflecting a relatively balanced participation from both financial and non-financial entities.
Corporate Bond Market Outlook
Looking ahead into FY25-26, India Bonds said the market shows signs of another strong year.
In FY25-26, we have already seen record issuances in bond markets by companies, it said. Further, it added that going ahead, India Bonds sees a very healthy growth once again of the corporate bond markets, led by new investors coming in through Online Bond Platforms, uncertainty in the equity markets and a reducing interest rate cycle.
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