Latest news with #Bondbazaar
Economic Times
5 days ago
- Business
- Economic Times
Corporate bonds to gain as RBI easing cycle nears, says Suresh Darak of Bondbazaar
As India inches closer to a potential monetary easing cycle, the corporate bond market is poised for renewed to Suresh Darak, Founder of Bondbazaar, expectations of rate cuts in late 2025 or early 2026 could significantly boost corporate bond issuance, as companies look to lock in lower borrowing costs. Falling yields on government securities are also likely to drive investor appetite toward high-grade corporate bonds, improving pricing and deepening market participation. In an exclusive conversation, Darak outlines the emerging trends shaping India's bond landscape—from the rise in short-term issuances and evolving retail participation to the growing appeal of ESG bonds. Edited Excerpts – ADVERTISEMENT Q) We have already seen 100 bps rate cut from the RBI. Historically, how does a rate cut cycle influence corporate bond issuance in India?A) Rate cut cycles have historically had a positive impact on corporate bond issuance in India. As the RBI lowers policy rates, borrowing costs for corporates reduce, prompting companies to tap the bond market for refinancing or expansion at more favourable terms. Simultaneously, falling yields on government securities encourage institutional investors to seek higher returns in AAA rated corporate bonds (led by increase in spread between Gsec and AAA rated bonds), boosting demand and improving pricing for issuers. Many corporates also use this period to shift from short-term to longer-tenure borrowings. Additionally, investors holding long-dated G-Secs or high-grade bonds often benefit from capital gains in the secondary market as yields fall. Q) With rate cuts expected, do you foresee a significant uptick in corporate bond issuance in the coming quarters? A) While a rate cut in the upcoming August policy is unlikely, expectations are building for easing to begin in late 2025 or early 2026. ADVERTISEMENT Once monetary easing begins, it is likely to trigger a significant uptick in corporate bond issuance, as issuers seek to lock in lower borrowing shift in interest rate expectations will also improve risk appetite among investors, further supporting issuance volumes. ADVERTISEMENT Q) There's been a pick-up in short-term corporate bond issuance recently. What's driving this trend?A) Short-term corporate bond issuance (up to 5 years maturity) has seen a marked rise, largely driven by interest rate expectations and improving liquidity conditions. In May 2025 alone, Indian companies raised ₹61,200 crore via five-year bonds—nearly a threefold jump from ₹21,400 crore in May fund allocations to 1–5 year bonds have grown significantly, driven by better system liquidity and attractive spreads of 30–40 basis points over comparable alternatives. Issuers are also preferring shorter tenors amid uncertainty around the timing and quantum of rate cuts. ADVERTISEMENT Q) Are retail investors showing interest in short-term corporate bonds or is demand largely institutional?A) Retail participation in corporate bonds has increased meaningfully over the past two years, aided by SEBI's regulatory reforms such as enhanced market accessibility to increase transparency, lowering of Minimum Investment Amount (i.e. Face Value from Rs. 10 Lacs to now Rs. 1 Lacs / Rs. 10,000 / Rs. 1,000) have opened the door for more individual retail this progress, retail investors still account for less than 2% of the overall corporate bond market and institutional investors continue to dominate the market. ADVERTISEMENT Q) What's driving the growing popularity of these instruments? What sectors are leading India's ESG bond issuance?A) ESG bonds are swiftly transitioning from a niche product to a mainstream funding tool in India. This shift is driven by growing investor focus on sustainable finance, regulatory clarity from SEBI, and the global push for decarbonisation. SEBI's updated ESG framework has enhanced transparency, enabling issuers to attract a broader and more diverse investor base, often at more competitive FY 2025, ESG bond issuance in India stood at ₹8,743 crore across 27 deals, with most issues witnessing strong oversubscription. The renewable energy sector led the charge, with active issuers like ReNew, IREDA, and Avaada. Infrastructure giant L&T raised ₹500 crore through India's first listed sustainability-linked bond (SLB), while the Pimpri Chinchwad Municipal Corporation's green bond issuance of ₹100 crores received 5.13× Vertis Infrastructure Trust (formerly known as Highways Infrastructure Trust) has successfully raised ₹900 crore through a Sustainability Linked Bond (SLB), marking the largest SLB issuance by an Indian InvIT to date. With growing demand, pricing benefits, and widening sectoral participation, ESG bonds are becoming an increasingly important capital-raising tool for companies focused on sustainable and future-ready business models. (Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Time of India
5 days ago
- Business
- Time of India
Corporate bonds to gain as RBI easing cycle nears, says Suresh Darak of Bondbazaar
As India inches closer to a potential monetary easing cycle, the corporate bond market is poised for renewed momentum. According to Suresh Darak, Founder of Bondbazaar, expectations of rate cuts in late 2025 or early 2026 could significantly boost corporate bond issuance, as companies look to lock in lower borrowing costs. Falling yields on government securities are also likely to drive investor appetite toward high-grade corporate bonds , improving pricing and deepening market participation. In an exclusive conversation, Darak outlines the emerging trends shaping India's bond landscape—from the rise in short-term issuances and evolving retail participation to the growing appeal of ESG bonds. Edited Excerpts – Q) We have already seen 100 bps rate cut from the RBI. Historically, how does a rate cut cycle influence corporate bond issuance in India? Productivity Tool Zero to Hero in Microsoft Excel: Complete Excel guide By Metla Sudha Sekhar View Program Finance Introduction to Technical Analysis & Candlestick Theory By Dinesh Nagpal View Program Finance Financial Literacy i e Lets Crack the Billionaire Code By CA Rahul Gupta View Program Digital Marketing Digital Marketing Masterclass by Neil Patel By Neil Patel View Program Finance Technical Analysis Demystified- A Complete Guide to Trading By Kunal Patel View Program Productivity Tool Excel Essentials to Expert: Your Complete Guide By Study at home View Program Artificial Intelligence AI For Business Professionals Batch 2 By Ansh Mehra View Program by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Instant Payment for Used Cars Cars24 - Sell Your Car Sell Now Undo A) Rate cut cycles have historically had a positive impact on corporate bond issuance in India. As the RBI lowers policy rates, borrowing costs for corporates reduce, prompting companies to tap the bond market for refinancing or expansion at more favourable terms. Simultaneously, falling yields on government securities encourage institutional investors to seek higher returns in AAA rated corporate bonds (led by increase in spread between Gsec and AAA rated bonds), boosting demand and improving pricing for issuers. Bonds Corner Powered By RBI auctions help bring average call rate closer to repo The weighted average call rate remained below the repo rate. The Reserve Bank of India used variable rate repo and reverse-repo auctions. This was to align overnight rates with the policy gauge. In June, the WACR was closer to the lower end of the LAF corridor. The RBI prefers the overnight rate to align with the repo rate. Liquidity still a challenge, but corporate bond market progressing with policy push: Hajra India's top state green energy firm mulls first local bond sale Fibe's NBFC arm raises Rs 225 crore via NCDs to fuel innovation and lending growth Corporate bonds to gain as RBI easing cycle nears, says Suresh Darak of Bondbazaar Browse all Bonds News with Many corporates also use this period to shift from short-term to longer-tenure borrowings. Additionally, investors holding long-dated G-Secs or high-grade bonds often benefit from capital gains in the secondary market as yields fall. Live Events Q) With rate cuts expected, do you foresee a significant uptick in corporate bond issuance in the coming quarters? A) While a rate cut in the upcoming August policy is unlikely, expectations are building for easing to begin in late 2025 or early 2026. Once monetary easing begins, it is likely to trigger a significant uptick in corporate bond issuance, as issuers seek to lock in lower borrowing costs. The shift in interest rate expectations will also improve risk appetite among investors, further supporting issuance volumes. Q) There's been a pick-up in short-term corporate bond issuance recently. What's driving this trend? A) Short-term corporate bond issuance (up to 5 years maturity) has seen a marked rise, largely driven by interest rate expectations and improving liquidity conditions. In May 2025 alone, Indian companies raised ₹61,200 crore via five-year bonds—nearly a threefold jump from ₹21,400 crore in May 2024. Mutual fund allocations to 1–5 year bonds have grown significantly, driven by better system liquidity and attractive spreads of 30–40 basis points over comparable alternatives. Issuers are also preferring shorter tenors amid uncertainty around the timing and quantum of rate cuts. Q) Are retail investors showing interest in short-term corporate bonds or is demand largely institutional? A) Retail participation in corporate bonds has increased meaningfully over the past two years, aided by SEBI's regulatory reforms such as enhanced market accessibility to increase transparency, lowering of Minimum Investment Amount (i.e. Face Value from Rs. 10 Lacs to now Rs. 1 Lacs / Rs. 10,000 / Rs. 1,000) have opened the door for more individual retail investors. Despite this progress, retail investors still account for less than 2% of the overall corporate bond market and institutional investors continue to dominate the market. Q) What's driving the growing popularity of these instruments? What sectors are leading India's ESG bond issuance? A) ESG bonds are swiftly transitioning from a niche product to a mainstream funding tool in India. This shift is driven by growing investor focus on sustainable finance, regulatory clarity from SEBI, and the global push for decarbonisation. SEBI's updated ESG framework has enhanced transparency, enabling issuers to attract a broader and more diverse investor base, often at more competitive pricing. In FY 2025, ESG bond issuance in India stood at ₹8,743 crore across 27 deals, with most issues witnessing strong oversubscription. The renewable energy sector led the charge, with active issuers like ReNew, IREDA, and Avaada. Infrastructure giant L&T raised ₹500 crore through India's first listed sustainability-linked bond (SLB), while the Pimpri Chinchwad Municipal Corporation's green bond issuance of ₹100 crores received 5.13× bids. Recently, Vertis Infrastructure Trust (formerly known as Highways Infrastructure Trust) has successfully raised ₹900 crore through a Sustainability Linked Bond (SLB), marking the largest SLB issuance by an Indian InvIT to date. With growing demand, pricing benefits, and widening sectoral participation, ESG bonds are becoming an increasingly important capital-raising tool for companies focused on sustainable and future-ready business models.
&w=3840&q=100)
Business Standard
08-07-2025
- Business
- Business Standard
Why are short-term bonds in demand? Bondbazaar's Darak breaks it down
Bond market investors are looking beyond short-term geopolitical noise, anchored by strong domestic fundamentals, surplus liquidity, rate cuts and a dovish RBI Nikita Vashisht New Delhi Listen to This Article Bond yields on the 10-year Government securities have declined gradually so far in calendar year 2025. Despite inflation-related uncertainty due to the US President's tariff policies, SURESH DARAK, founder, Bondbazaar, tells Nikita Vashisht in an email interview that debt market investors remain constructively positive on bond market outlook. Edited excerpts: How do you assess H1-2025 for bond markets and what does H2 look like? Corporate Bonds and Sovereign Bonds witnessed a decline in yields in the first half of calendar year 2025 (H1-CY25). While 10-year Gsec declined 42 basis points in H1, the Corporate Bonds declined by ~70 bps -
Time of India
10-06-2025
- Business
- Time of India
Bank fixed deposits lose sheen! Post RBI rate cut, investors pick high-yielding corporate bonds; here's why
Bank fixed deposits lose sheen! Retail investors seeking enhanced returns from fixed-income portfolios are increasingly gravitating towards corporate bonds offering higher yields. Tired of too many ads? go ad free now This shift has intensified following the Reserve Bank of India's (RBI) reduction in repo rates by one percentage point since February, leading to decreased bank fixed deposit rates. These investors are focusing on state-guaranteed securities, NBFC bonds, and small finance and microfinance bonds, which provide superior returns compared to traditional bank deposits. State Bank of India's fixed deposits with 2-3 years tenure offer maximum returns of 6.7%, whilst state-guaranteed bonds from Telangana, Uttar Pradesh, Kerala and Andhra Pradesh, with 2-4 years tenure, yield returns between 9-10%. Various retail websites offer these bonds with a minimum investment requirement of ₹10,000. These platforms, known as Online Bond Platform Providers (OBPP), are SEBI-registered entities facilitating electronic bond transactions, according to an ET report. Corporate Bonds: What's On Offer Platforms such as Indiabonds, Bondbazaar, Grip Invest and Wint Wealth are experiencing increased trading activity. One platform reported doubled trading volumes in the current quarter compared to July-September 2024. Another platform witnessed a tenfold increase in new registrations compared to the previous year. Also Read | "Direct investments in bonds can typically offer an additional return of 3-5 percentage points over traditional fixed deposits," said Bondbazaar founder Suresh Darak according to the ET report. Several NBFCs and MFI bonds with AA or lower ratings from organisations like Muthoot Capital, MAS Financial, and Edelweiss Financial could potentially deliver returns of 10-12%. Tired of too many ads? go ad free now Financial advisers suggest creating a diversified portfolio of these bonds instead of concentrating investments in a single bond, whilst favouring shorter durations of 2-3 years. "Investors may consider two-, three-year bonds, which balance yield potential with visibility on credit risk and interest rate movements," said cofounder Vishal Goenka. He notes that the risk-free curve has steepened at the short to medium end with maturity of 2-3 years, making this segment attractive for those looking for better risk-adjusted returns without committing to long tenures. Also Read | "Diversify across issuers, tenures and ratings. Do not invest more than 10% in a single issuer, investing across one to three years helps manage reinvestment and interest rate risk and diversification ensures a risk-adjusted fixed-income portfolio," said Darak of Bondbazaar. Wealth managers recommend that investors monitor the company's financial performance and leadership history when purchasing high-yield bonds, considering their elevated risk levels. They advise limiting exposure by acquiring modest quantities of these bonds. (Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)
Economic Times
10-06-2025
- Business
- Economic Times
Retail investors shift focus to high-yield corporate bonds for better returns
Agencies Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Mumbai: Mumbai: Retail investors on the lookout for higher returns from their fixed-income portfolios are turning towards high-yielding corporate bonds. This has gathered pace after the Reserve Bank of India (RBI) cut repo rates by as much as a percentage point since February, which is forcing bank deposit rates are eyeing state-guaranteed papers, NBFC bonds and small finance and microfinance bonds , which give higher returns than bank deposits. These bonds are available through many retail websites where investors can buy them for as little as ₹10,000. These are Online Bond Platform providers (OBPP), SEBI registered platforms that facilitate buying and selling bonds are using platforms like Indiabonds, Bondbazaar, Grip Invest and Wint Wealth among others to buy these bonds, with volumes growing on these platforms. Traded volumes on one of the platforms doubled this ongoing quarter compared with July-September 2024 quarter. At another, there is 10-fold growth in signups now compared with a year earlier."Direct investments in bonds can typically offer an additional return of 3-5 percentage points over traditional fixed deposits," said Bondbazaar founder Suresh Darak. While a fixed deposit from State Bank of India can offer a maximum of 6.7% for a deposit with a tenure of 2-3 years, state-guaranteed bonds from Telangana, Uttar Pradesh, Kerala and Andhra Pradesh with a tenure of 2-4 years could offer yields of 9-10%.In addition, some NBFCs and MFI bonds rated AA or lower are available from Muthoot Capital , MAS Financial, Edelweiss Financial and could potentially offer 10-12% managers believe investors should build a portfolio of these bonds, rather than putting all their money in a single bond, and opt for shorter tenures of 2-3 years."Investors may consider two-, three-year bonds, which balance yield potential with visibility on credit risk and interest rate movements," said cofounder Vishal Goenka. He believes the risk-free curve has steepened at the short to medium end with maturity of 2-3 years, making this segment attractive for those looking for better risk-adjusted returns without committing to long tenures."Diversify across issuers, tenures and ratings. Do not invest more than 10% in a single issuer, investing across one to three years helps manage reinvestment and interest rate risk and diversification ensures a risk-adjusted fixed-income portfolio," said Darak of managers advise investors to keep a track of the financials of the company and the management's track record while buying high-yielding bonds, given that they carry higher risk. Investors should spread their risk by buying a small quantity of these bonds, they said.
