Corporate bond market records robust growth, poised for another strong year
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.
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. Breakdown of India's corporate bond market
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.
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.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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