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Dehuti Jani is an experienced project manager who also works as an independent financial journalist.
June 22, 2026 at 11:02 AM IST
Financial issuers dominated India’s corporate bond market in the first couple of months of the financial year that began in April. This appears to be changing.
Companies in power, manufacturing and real estate are now testing investor appetite in the bond market. Recent transactions and planned fundraisings by Torrent Power, Godrej Industries, Embassy Office Parks REIT, Knowledge Realty Trust and RAK Ceramics India suggest as much.
Slow Start
Primary issuance data from NSE and BSE platforms showed fundraising by non-financial issuers fell by more than three-fourths in the first two and a half months of 2026-27.
This was despite lower interest rates, ample banking system liquidity and strong investor demand for high-quality corporate debt.
Also, April-June of 2025-26 saw several large industrial and infrastructure borrowers tap debt markets. By contrast, financial institutions including NABFID, NABARD, SIDBI, REC, Bajaj Housing Finance, HDB Financial Services, Mahindra & Mahindra Financial Services and Aditya Birla Capital have led primary issuance so far this financial year.
April-June of the financial year 2025-26 witnessed several large industrial and infrastructure borrowers had tapped debt markets.
The slower pace of non-financial bond issuance does not necessarily reflect weak investor demand.
“Large corporates have continued to favour bank funding as lenders remain aggressive on pricing, reducing the immediate need to access bond markets,” said Vinay Pai, head of fixed income at Equirus Group.
Pai said recent RBI measures facilitating overseas borrowing were likely to benefit public sector borrowers, while others will continue to evaluate funding options across bank loans and bonds.
Banks have remained competitive on loan pricing even as bond market conditions improved. This allowed many companies to defer market borrowings.
Investor Demand
Investor demand remains supportive, particularly among long-term institutional investors.
“Domestic institutional demand remains strong across maturities, with mutual funds, insurers and provident funds continuing to seek high-quality bond supply,” said debt market veteran Venkatakrishnan Srinivasan.
Srinivasan said the key decision for borrowers was no longer access to funding but the choice of funding route, with companies evaluating bank loans, rupee bonds and foreign-currency borrowing based on relative costs.
Broader Participation
Recent transactions and pipeline indicate that a broader range of issuers may be beginning to test investor appetite.
Market participants cautioned that these transactions remain modest compared with the large fundraisings routinely undertaken by development finance institutions and public-sector financial entities.
However, the emergence of issuers from power, manufacturing, infrastructure and commercial real estate suggests the market’s issuer base may be gradually broadening after a lender-led start to 2026-27.
Whether this develops into a wider corporate fundraising cycle remains uncertain. But recent activity indicates that non-financial issuers, absent from the market in large numbers for much of the quarter, are beginning to test debt markets as funding conditions remain supportive and investor demand stays firm.
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