Local companies are expected to increase £11 trillion from bond markets in the financial year 2025-26, according to sectoral experts. £9.95 trillion increased through public and private debt problems related to FY25 according to data regulatory body, which means an estimated annual increase in about 10.5% of this fiscal.
“With a faster transmission of a recent reduction in the debt capital market rates compared to banking loans rates, businesses preferred to raise funds through bonds rather than banks from banks,” said Sachin Sachdeva, vice -chairman and head of the sector.
The Committee for Monetary Policy of the Indian Reserve Bank reduced the Repo rate by 25 basis points (BPS) in February and April. This was followed by a reduction in 50 BPS in June, leading to a decline in 100 BPS at a reference rate in five months. RBI also injected liquidity by reducing the ratio of cash – part of the deposits that creditors must park with a regulator – 1 percent point.
According to experts, bonds responded quickly, making it more cost -effective and flexible option for large nominal loans. Benchmark 10 -year revenue of government bonds dropped by 37.6 basis points from 6.700% on 31 January to 6.324% 30 June. For comparison, RBI data show that the annual boundary costs of borrowing based on funds-interior benchmark, which monitors deposits-with during the period during this period by 10 basis points.
“This interest rate arbitration causes bond issuing significantly more attractive,” said Nikhil Aggarwal, founder and head of the Grip Invest Group, a platform for investment with high income and income. “Reduces a softer speed cycle, refinancing requirements, and CAPEX plans to control the volume of issuing. If current momentum continues, £12.5 trillion is within reach. ”
ICRA’S SACHDEVA expects total bond issuing in FY26 £10.7 to £11.3 trillion.
Outlook Strong
So far, this fiscal year reflects the optimistic outlook. Data from the Indian Council for Securities and Exchange (Sebi) show 341 questions in value £1.86 trillion in April and May. According to Prime Database, 165 offers in the amount of around £In June, 0.93 trillion was recorded (SEBI data for June have not yet been published).
This means that Indian companies have grown up £2,79 trillion over 506 locations of private bonds in the first quarter of FY26. According to SEBI data, the company received an increased company £1.56 trillion via bonds in the corresponding period of FY25.
According to the main database, some of the three -year bonds with AAA ranking issued in June 2025: Bajaj Housing Finance LTD with a coupon rate of 7.02% per year; L&T Finance LTD with a coupon rate of 7.23% per year; and the National Bank for Agriculture and Rural Development (NABARD) with a coupon rate of 7.48% per year.
By comparison, MCLR Banks amounted to 8.9%in June. Their loans of industry-Micro, small, medium and large-fashioned 4.8% in May, showed the latest RBI data. However, the bank loan increased by 1%during the period.
Certainly, private locations continue to dominate Corporate Bond offers, with public problems contributing a fraction. Sebi data shows raised offers of 45 public bonds £0.19 trillion in FY24 and 43 such an edition raised around £0.08 trillion in FY25.
Insufficiently developed market
The Indian bond market remains insufficiently developed, which represents only 18% of gross domestic product, which is far below 70-100% in developed economies, said Aggarwal of Grip Invest. According to an economic survey by FY25, the corporate bond market is 80% of GDP in Korea and 36% in China. The report that was published in January pointed out that the market bonds include top bonds, with 97% of corporate bond emissions focusing in the top 3 rating categories (AAA, AA+ and AA).
In addition, the issuance could be alleviated in the second half of the financial year, as RBI will consider incoming growth and inflation data to decide on the Trajectory of Reposition, said additi Mittal, co -founder of Bond Investment Platform Indiabonds. However, due to the RBI pause, the decrease in rates and the uncertainties on the global market, however, remains supportive for demand, she said.
“If the current momentum keeps, £12 trillion is certainly achievable. However, a more conservative and realistic estimate would be in extent £11-11.5 trillion, ”Mittal said.
While RBI reduction with 100 BPS repo and CRR reduction has reduced loan costs, Mittal deepens strong institutional demand from mutual funds, insurance companies and pension funds.
“Since global macro risks are getting closer, businesses are locked soon, especially for refinancing or preventive CAPEX financing,” she said. “The sharp decline in short -term revenues also made one to three -year bonds highly attractive, leading to the strong participation of the issuer.”
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