Corporate Bond issuances hit 4-year high in Q1, surpass Rs 3 lakh crore mark
In the April-June quarter, issuances reached a peak of Rs 3.27 lakh crore, representing a 42.7 per cent increase over the Rs 2.29 crore recorded in the same quarter the previous year, a report from Bank of Baroda (BoB) said.
Debt issuances have seen a mixed pattern in the said period. It has risen from Rs 1.44 lakh crore in 2022 (Q1) to Rs 2.86 lakh crore in 2023 and then slowed down to Rs 2.29 lakh crore in 2023, the first quarter.
The development indicates an increase in potential investment, as most debt raised in the market is for financing investment, according to the report.
The financial services segment has been the dominant player in issuance, as it remained a major source of funding for its lending operations in the first quarter for the past three years.
The sector had accounted for more than three-quarters of the issuances in 2023 (79.2 per cent) and 2024 (74.6), but came down to 62 per cent in 2025, the data showed.
Manufacturing, electricity, and diversified groups of companies all saw a sharper increase in issuances from other sectors.
Meanwhile, the weighted average yield on corporate bonds for AAA and AA-rated bonds tended to have more favourable rates compared with bank borrowings, where the weighted average lending rate (WALR) on fresh loans tended to be higher.
In Q1 2025, bank WALR was lower than the 10-year yield for an AA rated bond, the report said.
Corporate bond spreads for AAA paper for 10 years are presently ruling at between 80-90 bps, while it is around 200 bps for AA-rated paper, the report noted.
The low interest environment will provide a further boost to this segment, the report said.
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