Have Corporate Bond Issuances Increased by 8% to Rs 6.3 Lakh Crore Until October This Fiscal?
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Synopsis
Corporate bond issuances in India have shown a significant increase of 8% year-on-year, amounting to Rs 6.3 lakh crore as of October FY26. This growth, alongside rising commercial paper issuances and bank credit, highlights a dynamic financial landscape amidst cautious foreign investment trends. Discover the key insights from SBI's latest report.
Key Takeaways
- Corporate bond issuances rose by 8% YoY to Rs 6.3 lakh crore.
- Commercial paper issuances increased by 13% YoY to Rs 9.8 lakh crore.
- Bank credit growth was reported at 11.3% for the fortnight ending October 31.
- Deposit growth stands at 2.6% YoY.
- Liquidity management is essential due to discrepancies between credit and deposit growth.
New Delhi, Nov 16 (NationPress) The issuance of corporate bonds has experienced an 8% year-on-year (YoY) increase, reaching Rs 6.3 lakh crore by the end of October in this fiscal year (FY26), up from Rs 5.8 lakh crore during the same timeframe last year (FY25), as reported by SBI research on Sunday.
Additionally, commercial paper (CP) issuances surged by 13% YoY, totaling Rs 9.8 lakh crore compared to Rs 8.6 lakh crore a year earlier.
The credit from all scheduled commercial banks (ASCB banks) rose by 16% YoY in FY26 (up to October), with a year-to-date (YTD) credit growth of 6.3%.
On the deposits side, the report indicates a YoY growth of 2.6% in FY26 (until October), while the YTD deposit growth stands at 7.1%.
During the fortnight ending October 31, bank credit growth was reported at 11.3%, whereas deposit growth rose to 9.7%, up from 9.5% in the same period.
The emerging signs of credit growth amidst slow deposit growth necessitate improved liquidity management strategies.
Since August, the spread between the 10-year AAA corporate bond and government securities (G-sec) has been declining. However, the spread for the 5-year bond actually increased in October.
Furthermore, the difference between the Repo rate and the weighted average rate of Commercial Paper (CP), which was negative in FY21, rose to 114 bps in FY25 and is currently at 90 bps in October.
Similarly, the gap between the Repo rate and 3-month Certificates of Deposit (CD) has also shifted from negative in FY21 to approximately 83 bps in FY25, now at 45 bps in October, as noted in the report.
Mutual funds have seen a surge in liquidity for short-term instruments over the last month, amounting to Rs 1.33 lakh crore, marking a recovery from previous outflows in September and a downtrend in August, suggesting a preference for short-term investments.
The report emphasizes that Foreign Portfolio Investors (FPIs) have adopted a cautious approach towards emerging markets recently, as volatility has impacted capital flows.
Nevertheless, inflows across various debt segments have defied this trend, remaining positive for most months, reaffirming confidence in the Government of India’s macro fundamentals and ongoing reforms, according to SBI Research.
Point of View
The reported increase in corporate bond issuances and commercial papers highlights a resilient financial environment in India. While volatility affects foreign investments, the sustained growth in domestic credit and deposits suggests confidence in our economic policies. It is crucial to monitor these trends as they reflect the broader health of the market, ensuring that we remain aligned with national interests.
NationPress
16/11/2025
Frequently Asked Questions
What are corporate bonds?
Corporate bonds are debt securities issued by companies to raise capital, offering investors fixed interest payments over a specified period.
How do corporate bond issuances impact the economy?
Increased corporate bond issuances can indicate growing business confidence and investment, which can positively influence economic growth.
What is the significance of commercial papers?
Commercial papers are short-term unsecured promissory notes issued by companies to finance their short-term liabilities, reflecting liquidity in the market.
What trends are observed in bank credit growth?
Bank credit growth is a key indicator of economic activity, and a significant rise often suggests increased consumer and business borrowing.
Why should investors pay attention to these financial reports?
Financial reports provide insights into market trends, helping investors make informed decisions based on economic conditions and forecasts.
