Corporate Bond Mobilisation Declines 8.4% in FY26, Marking First Drop in Four Years, Reports Sebi
In the financial year 2025-26, the Indian corporate bond market witnessed a notable contraction in fund mobilisation, declining by 8.4% to reach Rs 9.1 lakh crore. This represents the first downturn in fundraising since the 2021-22 fiscal year. Despite this overall shrinkage, market activity remained robust, highlighted by an increase in the number of corporate bond issuances, which rose to 1,967. This uptick indicates sustained participation from issuers, reinforcing the notion that while fundraising through bonds is under pressure, market dynamics persist in adapting.
The increase in public issuances, which surged by 39.2% to Rs 11,343 crore, showcases a clear strategic shift towards broader market access. However, this momentum remains heavily tilted towards private placements, which accounted for an overwhelming 98.8% of total funds mobilised. Public issuances comprised 43 distinct issues, predominantly from the financial sector (40 issues). The data also reveals that a substantial portion of the funds—50.1%—was mobilised from issues between Rs 100 crore and Rs 500 crore, while larger issuances over Rs 500 crore accounted for 41.6% of total mobilisation, indicating differing strategies among issuers based on financing needs.
Supporting this evolving landscape, the activity in secondary markets showed encouraging signs, as evidenced by a 27.9% increase in the volume of corporate bond trades settled by clearing corporations, reaching Rs 21.2 lakh crore. This growth underscores the vitality of listed corporate bonds, which constituted 89.5% of the traded value. The dominant participation of mutual funds, whose market share rose to 32.1%, further illustrates a shift in investor dynamics, contrasting with declines in bank and corporate participation. This indicates an evolving investor base increasingly attracted to corporate bonds, driven by their perceived stability and yield potential in a fluctuating financial environment.
The municipal bond sector further demonstrated strong growth, with civic bodies successfully raising Rs 1,756 crore through 14 issuances, a stark rise from previous years, illustrating enhanced investor confidence. This surge can be attributed, in part, to regulatory initiatives aimed at increasing financial literacy and awareness surrounding municipal bonds. Additionally, commercial paper listings displayed a healthy growth of 7.8%, enhancing liquidity within the shorter-term debt instruments market. Collectively, these trends highlight the ongoing maturation of the bond market in India, though challenges persist, particularly regarding the predominance of private placements, which limit broader market engagement.
Source: The Economic Times
(Expert Note: This report was prepared by the Wealthova team.)