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The appetite for tapping the bond market to raise funds can be gauged from the Reliance Industries announcement late last month that it will raise up to ₹25,000 crore
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SANJAY SHARMA
Bond issuances by India Inc could surge to touch about ₹11.50-12.00 lakh crore in FY26 as corporates rush to take advantage of easy liquidity and lower interest rates to lock in funds for a longer duration.
India Inc’s resource mobilisation via bonds rose about 18 per cent year-on-year (y-o-y) to ₹9,87,056 crore in FY25 against ₹8,37,756 crore in FY24, per SEBI data.
Banks’ continued focus on lending to highly rated corporates (with at least “A” or higher rating) in order to avoid asset quality issues may also prompt the lower rated ones to tap bonds in a big way to mobilise resources.
Venkatakrishnan Srinivasan, Founder and Managing Partner, Rockfort Fincap LLP, opined that the growth in bond issuances will be driven by aggressive liquidity infusion, a dovish monetary policy stance, and a front-loaded borrowing rush by marquee issuers.
As corporations hurry to lock in funding amid continued repo rate cuts and abundant system liquidity, total issuances in FY26 are forecast to comfortably cross ₹11 lakh crore—a new milestone, he added.
Ajay Manglunia, Executive Director, Capri Global Capital, observed that companies rated below “AA”, are not easily getting money from banks. However, investors such as HNIs and family offices, who are in quest of good returns, are willing to lend to them.
“Bond issuances this year could grow 15-20 per cent y-o-y, aided by softer rates. So, when the rates are down, corporates will rush to mop up resources,” he said.
Venkatakrishnan noted that April 2025 witnessed an all-time high in terms of primary market activity in bonds (total issuances at about ₹1 lakh crore), surpassing all previous April month issuances. This record volume came on the back of the April rate cut, a clear shift in monetary policy stance, and continuous liquidity infusion into the banking system.
The appetite for tapping the bond market to raise funds can be gauged from the Reliance Industries announcement late last month that it will raise up to ₹25,000 crore through issuance of listed, secured / unsecured, redeemable non-convertible debentures in one or more tranches on private placement basis.
The Rockfort Fincap Chief observed that issuers rushed to the market to lock in low-cost funding, breaking away from the traditional lull that April usually sees. This underscores the urgency among corporates to secure debt at sub-7 per cent annualised coupon rates.
“The infrastructure sector, both public and private, is expected to dominate borrowing in FY26…Banks are targeting more than ₹1 lakh crore in infrastructure bond issuances this fiscal to meet priority sector lending norms.
“AAA- and AA-rated non-bank financial companies (NBFCs) are not far behind. Their refinancing needs and new capex plans will lead to more fixed-rate bond issuances, taking advantage of yield compression,” he said.
Published on May 19, 2025
This article first appeared on The Hindu Business Line
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