Fundraising through corporate bonds has surged to a record high of Rs 10.11 lakh crore so far in 2024, driven by factors such as low interest rates, increased issuances by non-banking finance companies (NBFCs), and infrastructure bond issuances by banks.
According to the data compiled from Prime Database, over Rs 6 lakh crore, or 60 percent of the total corporate bond issuances so far this year, was raised by NBFCs, which tapped the route after the Reserve Bank of India (RBI) raised risk weights on bank loans to them.
“Diversified borrowings by AAA state-owned entities, reduction in the yield on corporate bonds tracking easing G-sec yield, and infrastructure bond issuances by banks helped increase the bond issuances in 2024,” said Venkatakrishnan Srinivasan, founder and managing partner of Rockfort Fincap LLP.
Further, institutional investors, including insurance companies, pension funds and mutual funds, actively sought long-duration assets amid the declining interest rate environment. This led to over 30 issuances of Rs 5,000-10,000 crore in single tranches, showcasing robust demand for high-quality corporate debt, experts said. Read more
Source: Money Control