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Business Standard
5 days ago
- Business
- Business Standard
Investors pivot to quality, fundamental picks over momentum: PGIM India MF
As investment patterns in the Indian markets shift to high growth and good quality stocks, PGIM India MF suggests a portfolio strategy Listen to This Article Indian equities are witnessing a significant shift in investment trends, moving away from momentum-driven strategies toward high-growth, quality companies, according to PGIM India Mutual Fund. Amid stretched valuations and increased market scrutiny, analysts advise focusing on portfolios with a strong domestic orientation. Market rotation: From momentum to quality Markets have regained the ground lost in the first half of the year. Between April 2023 and June 2024, low-quality, poor-growth stocks in the NSE 500 universe surprisingly led the rally, delivering 84 per cent returns, while high-quality names lagged slightly behind at 51 per cent, PGIM India Mutual Fund data shows. In the
Economic Times
01-08-2025
- Business
- Economic Times
The Golden Thumb Rule: Medical inflation is a silent threat—PGIM India's Ajit Menon urges investors to plan proactively
In an era where living longer is becoming the norm, the cost of staying healthy is quietly escalating. Medical inflation—often overlooked in financial planning—is emerging as one of the biggest threats to a secure and stress-free retirement. In this edition of The Golden Thumb Rule, Ajit Menon, CEO of PGIM India Mutual Fund, sheds light on why medical costs are the silent killers of retirement dreams. Drawing from research and real-life investor behavior, he explains why relying solely on employer-provided health insurance isn't enough—and why proactive planning, including adequate health cover and disciplined investing, is essential for achieving true financial freedom. Edited Excerpts - ADVERTISEMENT Kshitij Anand: Most people in their 30s or even 40s tend to push retirement planning to the backburner, saying such things are too far away to worry about at this point. Why do you believe that mindset is risky, and why is it critical to start early? Ajit Menon: I would first say that this mindset—of delaying things that are far in the future—is a human condition. This isn't just applicable to us in India; it applies to people all over the world. Retirement, therefore, is a subject of interest and importance globally, not just in India. What makes it even more important in India is that we don't have the kind of social security systems that many developed countries provide for their people. That makes it even more essential for individuals to take responsibility for their own retirement planning. Just for a moment—and I don't want to get too technical—but from a biological perspective, the risks we react to as humans are typically those we can see, touch, feel, or hear. Because things like long-term retirement and climate change aren't immediately tangible, they become extremely difficult for humans to plan for, and that requires even though I've been in the industry for decades, I have a financial advisor for planning my finances and those of my family. That's one piece of standard advice I would give to others as well. ADVERTISEMENT Now, more importantly, let's look at some simple facts about why it's so important to start early—primarily due to the cost of delay. Take, for instance, a 30-year-old who wants to retire at 60 with a corpus of ₹2 crore. Compare that to someone aged 40 or 50 with the same retirement goal. For the 30-year-old, the required monthly investment is around ₹5,500. For the 40-year-old, it rises to over ₹20,000. And for the 50-year-old, it jumps to more than ₹85,000 per month. That's the cost of the earlier one starts, the more manageable it becomes—and it allows you to live your life while consistently prioritising retirement. The cost of delay and our natural tendency to not think far ahead are both issues young people need to recognise. ADVERTISEMENT Kshitij Anand: Absolutely. You've said it well—the golden thumb rule here is that the cost of delaying retirement planning is something everyone should take note of. We often hear about retiring rich, which has now become a buzzword on social media, even Instagram reels. But these are serious questions. So, while retiring rich or retiring early sounds attractive, what does a comfortable retirement really mean in practical terms? Ajit Menon: Since we're from the financial world, we tend to think about everything in financial terms. But when I talk to investors, I often remind them that our lives are deeply interconnected. So, if you're thinking about a comfortable retirement, the first principle should actually be your health—even more than your issues can significantly derail your plans and corpus. And we've all seen this—our family members in their 60s, 70s, and 80s often struggle with serious health conditions, not just aches and pains. Medical expenses can be high, and chronic conditions are common. So, yes, the first principle is health. ADVERTISEMENT The second, closely linked principle, is purpose. For some reason—maybe because we're anchored in the experiences of our elders—retirement is often seen as a phase where you just stop working and live off your savings, watching Netflix or scrolling through social media. But that's not more important, though not easy, is to visualise and plan: What will I do in my retirement years? Whether you retire at 40 or 60, keeping yourself purposeful has a big impact. Purpose strengthens your mental health, which in turn positively affects your physical health. ADVERTISEMENT Ultimately, the goal is to be better than the average retiree. If you can solve for these two—health and purpose—you've cracked the code. So, for me, a happy, comfortable retirement equals well-being. I wouldn't want to sound moralistic and say, 'Live within your means.' Aspirations are high today—for both the younger and older when I speak to my children, I tell them that anyone who wants to be happy can be happy. The problem arises when you want to be happier—because that immediately leads to comparison. Happier than whom? Someone's holiday? Their second car? That's just human yes, overall well-being—of mind, body, spirit, and purpose—is key to a truly comfortable retirement. Kshitij Anand: Absolutely. Another golden rule is that health is wealth, and mental health should be a top priority. If someone is planning for retirement, they should also understand what they intend to do once they retire. That sense of purpose is crucial, because doing nothing can often lead to many problems. We've seen this happen to people... Ajit Menon: And there's a lot of psychology involved in this. I would say that at PGIM, we are the only asset manager that conducts research with NIQ Nielsen on retirement readiness. We've found that people who have a plan and a purpose—who pursue their passions after retirement—are much more prepared for it. Professionals, for example, don't struggle as much as people in more conventional also observed that people typically plan only for 'happy goals'—a child's education, a child's marriage, buying a house or a car, starting a business, going abroad. But retirement, especially for those in service, is often not viewed as a 'happy' goal. So, the first principle is to make it we suggest is to change the language—because words have power. Instead of thinking of it as 'retirement,' think of it as 'financial freedom.' Just reframing it that way can bring more joy. Whether you're 30 or 60, if you tell yourself, "I want financial freedom, and here's what I intend to do," it becomes more meaningful. Kshitij Anand: Absolutely. In fact, looking forward to retirement should bring happiness. You should be able to say, 'Okay, when I turn 60, I'll be doing this,' and that thought should bring a smile to your face. That mindset makes you more eager to step into that phase of life. Yes, there's a lot of psychology involved, and it helps you maintain your health—and when your health is maintained, your wealth is preserved too. But let me also quickly come to the elephant in the room—inflation—especially medical inflation, which is a silent killer. How do you suggest investors plan for this when thinking about retirement? Ajit Menon: You're absolutely right. Inflation in general—and medical inflation in particular—can be very challenging. For many families, rising education costs are another big concern. These two—medical and education inflation—are difficult to manage over time.A lot of working professionals receive medical insurance from their employers and assume that's sufficient. But if you're genuinely thinking about financial freedom, it's important to ensure that you have adequate health insurance—one that has the features and flexibility you'll need over the long in the older generation may not have had access to the kind of products that are available today—products with no-claim bonuses and other useful features. So it's important to evaluate these options carefully. As I always say, having a good advisor to guide you on what's appropriate for you is critical—and the earlier you do this, the course, nothing replaces your own efforts to stay healthy. That said, I'm actually very hopeful—not necessarily about our generation or the ones before—but about the younger generation. Their awareness of health and fitness is far higher today than what we experienced growing up. Kshitij Anand: And let me also get your perspective. There's a lot of talk about this 4% rule—withdraw 4% a year in retirement. Does that still work in the Indian context today? Ajit Menon: A little history here—this idea of the 4% rule originated from research by a gentleman named William Bengen in the U.S. He proposed the 4% inflation-adjusted withdrawal rate for retirement years. Now, while a lot of work has been done on this in developed markets, not much has been done in India. However, I do know that people like Ravi Saraogi and Rajan Raju have worked on this, and their findings were also covered in the media. I'm quoting their work here because they are among the few who have tried to adapt this rule to the Indian of the advantages that developed markets have is access to long-term data. Bengen, for instance, had over 100 years of data to perform rolling 30-year retirement analyses and determine feasible withdrawal rates based on various market conditions. In contrast, our stock markets are relatively young, with around 45 to 48 years of history. That makes it much harder to analyze long-term retirement scenarios in India. So, that's one considering that retirement today may last 25–30 years—and with increasing longevity, there's research suggesting that people born today may live well beyond 100—this becomes even more the research by Ravi Saraogi (at Samasthiti) and Rajan Raju, they used the available data, ran Monte Carlo simulations, and did extensive analysis to test the 4% rule in the Indian context. What they found is that while the 4% rule may work sometimes, a safer withdrawal rate in India is somewhere between 3% and 3.5%.Now, there's a bit of jargon here when we talk about withdrawal rules. But as a basic thumb rule, one should understand that the difference between the return on your portfolio and the inflation of your household—that is, the real return—is what really if you're earning 10% annually and your household inflation is 6%, your real return is 4%. Ideally, your withdrawal rate should be aligned with that real return to avoid dipping into your capital. That way, you preserve your it's a bit complicated because you need to reassess it each year—ask yourself, 'Has something changed?' Hopefully, by the time people reach their later years, children are educated and independent, and if you've managed your health well, your financial dependencies may simplicity, many prefer a fixed number, and in that case, a conservative withdrawal rate of 3% to 3.5% is advisable. Ultimately, a good financial advisor can help tailor this to your household needs. Kshitij Anand: Also, we talk a lot about equity. Is equity still the best vehicle for building a retirement corpus, especially for young investors? Or should there be a mix with debt or other asset classes? Ajit Menon: Given the historical returns of equity, it's very tempting to think of it as the be-all and end-all solution for retirement planning. But as the saying goes, something may be sufficient but not necessary to solve all problems. So, the short answer is: No, you cannot have a 100% equity portfolio going into during the accumulation phase—as you asked, particularly for young people—equity can be a very effective tool. If you have a long investment horizon, a well-diversified equity fund can serve you well. But I'd add a note of caution—one rooted in common sense: never buy something when it's you're shopping at a mall, buying real estate, or investing in gold, everyone loves a good deal. Yet somehow, our interest in equity spikes when the markets are booming—and that's when it's if someone were to say, 'Cut the jargon, give me a simple product I can invest in as a young person,' my personal bias is towards the Balanced Advantage Fund category in mutual funds. These funds have built-in asset allocation strategies—they reduce equity exposure when markets are expensive and increase it when markets are more reasonably conservative or even moderate investors, these funds can serve as a 'fill-it, shut-it, forget-it' solution. They help counteract behavioral biases and market timing in retirement, a 100% equity allocation is risky. For some, it might be a necessity due to inadequate savings, but I would urge caution. If you retire with a corpus that is fully in equity and the market dips during your first few years of retirement, you risk drawing down your capital too quickly—and you may not get a chance to excellent work—again by Ravi Saraogi, Rajan Raju, and others—has shown that equity is not always the best answer on its own. That said, having some equity is absolutely critical, as long as you're disciplined enough not to touch it during short-term market volatility and give it time to deliver returns. Kshitij Anand: So, if we go by human psychology, we always like things that are expensive—whether it's cars, perfumes, or anything else costly, that really attracts us. Ajit Menon: Right. Kshitij Anand: So, equity is no exception, I would say. Ajit Menon: Exactly. And again, I think there is a generation that doesn't get it, but I'm very hopeful about the younger generation. We worry about them, but they get it. They know how to do their research to get a discount on what they like. Of course, there will always be two sets of people. Sometimes, having money, affluence, or privilege can shape that we are talking about a very large audience—especially in India—where people struggle with their basic income and are not thinking of financial goals, but just building a corpus. And therefore, the golden thumb rule is: don't buy anything that is expensive. You can get good-quality stuff at a discount. You know you're already doing that in other aspects of your life—apply the same logic to equity as I would say a balanced advantage fund does it automatically for you, so that you don't have to worry about it. So, there's the balanced advantage fund coming in again. (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
01-08-2025
- Business
- Time of India
The Golden Thumb Rule: Medical inflation is a silent threat—PGIM India's Ajit Menon urges investors to plan proactively
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel In an era where living longer is becoming the norm, the cost of staying healthy is quietly escalating. Medical inflation—often overlooked in financial planning—is emerging as one of the biggest threats to a secure and stress-free this edition of The Golden Thumb Rule, Ajit Menon , CEO of PGIM India Mutual Fund , sheds light on why medical costs are the silent killers of retirement from research and real-life investor behavior, he explains why relying solely on employer-provided health insurance isn't enough—and why proactive planning, including adequate health cover and disciplined investing, is essential for achieving true financial freedom. Edited Excerpts -I would first say that this mindset—of delaying things that are far in the future—is a human condition. This isn't just applicable to us in India; it applies to people all over the world. Retirement, therefore, is a subject of interest and importance globally, not just in makes it even more important in India is that we don't have the kind of social security systems that many developed countries provide for their people. That makes it even more essential for individuals to take responsibility for their own retirement for a moment—and I don't want to get too technical—but from a biological perspective, the risks we react to as humans are typically those we can see, touch, feel, or hear. Because things like long-term retirement and climate change aren't immediately tangible, they become extremely difficult for humans to plan for, and that requires even though I've been in the industry for decades, I have a financial advisor for planning my finances and those of my family. That's one piece of standard advice I would give to others as more importantly, let's look at some simple facts about why it's so important to start early—primarily due to the cost of delay. Take, for instance, a 30-year-old who wants to retire at 60 with a corpus of ₹2 crore. Compare that to someone aged 40 or 50 with the same retirement goal. For the 30-year-old, the required monthly investment is around ₹5,500. For the 40-year-old, it rises to over ₹20,000. And for the 50-year-old, it jumps to more than ₹85,000 per month. That's the cost of the earlier one starts, the more manageable it becomes—and it allows you to live your life while consistently prioritising retirement. The cost of delay and our natural tendency to not think far ahead are both issues young people need to we're from the financial world, we tend to think about everything in financial terms. But when I talk to investors, I often remind them that our lives are deeply interconnected. So, if you're thinking about a comfortable retirement, the first principle should actually be your health—even more than your issues can significantly derail your plans and corpus. And we've all seen this—our family members in their 60s, 70s, and 80s often struggle with serious health conditions, not just aches and pains. Medical expenses can be high, and chronic conditions are common. So, yes, the first principle is second, closely linked principle, is purpose. For some reason—maybe because we're anchored in the experiences of our elders—retirement is often seen as a phase where you just stop working and live off your savings, watching Netflix or scrolling through social media. But that's not more important, though not easy, is to visualise and plan: What will I do in my retirement years? Whether you retire at 40 or 60, keeping yourself purposeful has a big impact. Purpose strengthens your mental health, which in turn positively affects your physical the goal is to be better than the average retiree. If you can solve for these two—health and purpose—you've cracked the code. So, for me, a happy, comfortable retirement equals well-being. I wouldn't want to sound moralistic and say, 'Live within your means.' Aspirations are high today—for both the younger and older when I speak to my children, I tell them that anyone who wants to be happy can be happy. The problem arises when you want to be happier—because that immediately leads to comparison. Happier than whom? Someone's holiday? Their second car? That's just human yes, overall well-being—of mind, body, spirit, and purpose—is key to a truly comfortable there's a lot of psychology involved in this. I would say that at PGIM, we are the only asset manager that conducts research with NIQ Nielsen on retirement readiness. We've found that people who have a plan and a purpose—who pursue their passions after retirement—are much more prepared for it. Professionals, for example, don't struggle as much as people in more conventional also observed that people typically plan only for 'happy goals'—a child's education, a child's marriage, buying a house or a car, starting a business, going abroad. But retirement, especially for those in service, is often not viewed as a 'happy' goal. So, the first principle is to make it we suggest is to change the language—because words have power. Instead of thinking of it as 'retirement,' think of it as 'financial freedom.' Just reframing it that way can bring more joy. Whether you're 30 or 60, if you tell yourself, "I want financial freedom, and here's what I intend to do," it becomes more absolutely right. Inflation in general—and medical inflation in particular—can be very challenging. For many families, rising education costs are another big concern. These two—medical and education inflation—are difficult to manage over time.A lot of working professionals receive medical insurance from their employers and assume that's sufficient. But if you're genuinely thinking about financial freedom, it's important to ensure that you have adequate health insurance—one that has the features and flexibility you'll need over the long in the older generation may not have had access to the kind of products that are available today—products with no-claim bonuses and other useful features. So it's important to evaluate these options carefully. As I always say, having a good advisor to guide you on what's appropriate for you is critical—and the earlier you do this, the course, nothing replaces your own efforts to stay healthy. That said, I'm actually very hopeful—not necessarily about our generation or the ones before—but about the younger generation. Their awareness of health and fitness is far higher today than what we experienced growing up.A little history here—this idea of the 4% rule originated from research by a gentleman named William Bengen in the U.S. He proposed the 4% inflation-adjusted withdrawal rate for retirement years. Now, while a lot of work has been done on this in developed markets, not much has been done in India. However, I do know that people like Ravi Saraogi and Rajan Raju have worked on this, and their findings were also covered in the media. I'm quoting their work here because they are among the few who have tried to adapt this rule to the Indian of the advantages that developed markets have is access to long-term data. Bengen, for instance, had over 100 years of data to perform rolling 30-year retirement analyses and determine feasible withdrawal rates based on various market conditions. In contrast, our stock markets are relatively young, with around 45 to 48 years of history. That makes it much harder to analyze long-term retirement scenarios in India. So, that's one considering that retirement today may last 25–30 years—and with increasing longevity, there's research suggesting that people born today may live well beyond 100—this becomes even more the research by Ravi Saraogi (at Samasthiti) and Rajan Raju, they used the available data, ran Monte Carlo simulations, and did extensive analysis to test the 4% rule in the Indian context. What they found is that while the 4% rule may work sometimes, a safer withdrawal rate in India is somewhere between 3% and 3.5%.Now, there's a bit of jargon here when we talk about withdrawal rules. But as a basic thumb rule, one should understand that the difference between the return on your portfolio and the inflation of your household—that is, the real return—is what really if you're earning 10% annually and your household inflation is 6%, your real return is 4%. Ideally, your withdrawal rate should be aligned with that real return to avoid dipping into your capital. That way, you preserve your it's a bit complicated because you need to reassess it each year—ask yourself, 'Has something changed?' Hopefully, by the time people reach their later years, children are educated and independent, and if you've managed your health well, your financial dependencies may simplicity, many prefer a fixed number, and in that case, a conservative withdrawal rate of 3% to 3.5% is advisable. Ultimately, a good financial advisor can help tailor this to your household the historical returns of equity, it's very tempting to think of it as the be-all and end-all solution for retirement planning. But as the saying goes, something may be sufficient but not necessary to solve all problems. So, the short answer is: No, you cannot have a 100% equity portfolio going into during the accumulation phase—as you asked, particularly for young people—equity can be a very effective tool. If you have a long investment horizon, a well-diversified equity fund can serve you well. But I'd add a note of caution—one rooted in common sense: never buy something when it's you're shopping at a mall, buying real estate, or investing in gold, everyone loves a good deal. Yet somehow, our interest in equity spikes when the markets are booming—and that's when it's if someone were to say, 'Cut the jargon, give me a simple product I can invest in as a young person,' my personal bias is towards the Balanced Advantage Fund category in mutual funds. These funds have built-in asset allocation strategies—they reduce equity exposure when markets are expensive and increase it when markets are more reasonably conservative or even moderate investors, these funds can serve as a 'fill-it, shut-it, forget-it' solution. They help counteract behavioral biases and market timing in retirement, a 100% equity allocation is risky. For some, it might be a necessity due to inadequate savings, but I would urge caution. If you retire with a corpus that is fully in equity and the market dips during your first few years of retirement, you risk drawing down your capital too quickly—and you may not get a chance to excellent work—again by Ravi Saraogi, Rajan Raju, and others—has shown that equity is not always the best answer on its own. That said, having some equity is absolutely critical, as long as you're disciplined enough not to touch it during short-term market volatility and give it time to deliver And again, I think there is a generation that doesn't get it, but I'm very hopeful about the younger generation. We worry about them, but they get it. They know how to do their research to get a discount on what they like. Of course, there will always be two sets of people. Sometimes, having money, affluence, or privilege can shape that we are talking about a very large audience—especially in India—where people struggle with their basic income and are not thinking of financial goals, but just building a corpus. And therefore, the golden thumb rule is: don't buy anything that is expensive. You can get good-quality stuff at a discount. You know you're already doing that in other aspects of your life—apply the same logic to equity as I would say a balanced advantage fund does it automatically for you, so that you don't have to worry about it. So, there's the balanced advantage fund coming in again.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Economic Times
30-07-2025
- Business
- Economic Times
US debt crisis fuels de-dollarisation talk; may boost emerging markets: Puneet Pal
The growing fiscal challenges in the United States are starting to ripple across global markets, sparking renewed conversations around de-dollarisation. In an exclusive interaction with ETMarkets, Puneet Pal, Head of Fixed Income at PGIM India Mutual Fund, explains how the rising U.S. debt burden and persistent fiscal deficits are reshaping investor sentiment. While immediate outflows from U.S. bonds remain limited, Pal believes the long-term implications could be significant — potentially benefiting emerging market assets, including India. He also shares his outlook on yield curves, the shift in U.S. bond issuance strategy, and the broader impact on global fixed income markets. Edited Excerpts – ADVERTISEMENT Q) How would you describe the current size and depth of the corporate bond market in India?A) Indian corporate bond market is big, with over Rs. 53 lakh crore of outstanding corporate bonds. Not only in terms of the amount of outstanding bonds but also in terms of different types of instrument/structure, the corporate bond market in India is well developed. In terms of the depth, AAA rated securities dominate both the primary market and the secondary market liquidity. The key challenge is to increase the secondary market liquidity especially in lower rated securities. Institutional investors are, by far, the largest holders and participants in the corporate bond market. Retail participation is limited. Majority of the institutional investors in the corporate bond market are long only investors with a buy and hold is especially true in respect of lower rated bonds below AA with not many participants doing active trading, resulting in lower trading volumes compared to the government securities market. ADVERTISEMENT Thus, we can say that in spite of impressive increase in the total outstanding amount, depth of the corporate bond market remains relatively shallow. The daily trading volumes in the corporate bond market range between Rs. 8,000-10,000 crores on an average which pales in comparison to the daily average trading volumes in government securities market of Rs. 50,000-70,000 crores. ADVERTISEMENT Also, the corporate bond market remains an OTC market compared to the screen-based market in G-secs, which impacts price discovery, especially in lower rated we need to increase liquidity in the secondary market and along with it make the secondary market price discovery more efficient. Q) 2025 has seen record-breaking corporate bond issuances. What factors are driving this surge in new issuance? ADVERTISEMENT A) We have seen a decent increase in primary market activity this year. This is mostly driven by lower interest rates with issuers looking to lock in the current attractive yields. Majority of the issuance has been from NBFCs and PSUs. Q) The US is currently grappling with a growing debt crisis. How do you see this impacting global bond markets? A) The US economy is facing a huge debt challenge with elevated fiscal deficit. The rising debt burden and the Tariff issue has fuelled the narrative of de-dollarisation, leading to a search for diversification away from the US dollar/Bonds. ADVERTISEMENT Though, at present, this has not led to a meaningful flow away from US bond markets but can have potentially far-reaching consequences for US assets and can benefit emerging market assets. Given the fact that higher debt/fiscal deficit in US, will lead to US yields staying elevated, the yield curve can remain/become steeper including in the case of emerging markets. Q) Issuance of ultra-long-term US Treasury bonds has slowed down. What's driving this trend? A) The need to reduce the pressure on long end bond yields in US has led to more issuance at the shorter end and this trend may continue in the near term. (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
30-07-2025
- Business
- Time of India
US debt crisis fuels de-dollarisation talk; may boost emerging markets: Puneet Pal
The growing fiscal challenges in the United States are starting to ripple across global markets, sparking renewed conversations around de-dollarisation . In an exclusive interaction with ETMarkets, Puneet Pal, Head of Fixed Income at PGIM India Mutual Fund , explains how the rising U.S. debt burden and persistent fiscal deficits are reshaping investor sentiment. While immediate outflows from U.S. bonds remain limited, Pal believes the long-term implications could be significant — potentially benefiting emerging market assets, including India. He also shares his outlook on yield curves, the shift in U.S. bond issuance strategy, and the broader impact on global fixed income markets . Edited Excerpts – Q) How would you describe the current size and depth of the corporate bond market in India? Explore courses from Top Institutes in Please select course: Select a Course Category others Management Data Science Others Project Management Finance Data Analytics MCA Digital Marketing healthcare Design Thinking Leadership Operations Management Healthcare Cybersecurity MBA CXO Technology Product Management Data Science Skills you'll gain: Duration: 16 Weeks Indian School of Business CERT - ISB Cybersecurity for Leaders Program India Starts on undefined Get Details A) Indian corporate bond market is big, with over Rs. 53 lakh crore of outstanding corporate bonds. Not only in terms of the amount of outstanding bonds but also in terms of different types of instrument/structure, the corporate bond market in India is well developed. In terms of the depth, AAA rated securities dominate both the primary market and the secondary market liquidity. The key challenge is to increase the secondary market liquidity especially in lower rated securities. Bonds Corner Powered By GMR Energy in talks with investors to issue 5-year bonds India's GMR Energy plans to raise 16 billion rupees ($184 million) via five-year bonds, two sources told Reuters on Tuesday, as the holding firm for two major power units taps the market for fresh funding. US debt crisis fuels de-dollarisation talk; may boost emerging markets: Puneet Pal India bonds inch up before state debt supply, US rate decision Retail investors are waking up to bonds—here's why it matters, says Vineet Agarwal Fixed income isn't just for retirees, it belongs in every portfolio: Jiraaf's Vineet Agarwal Browse all Bonds News with Institutional investors are, by far, the largest holders and participants in the corporate bond market. Retail participation is limited. Majority of the institutional investors in the corporate bond market are long only investors with a buy and hold strategy. Live Events This is especially true in respect of lower rated bonds below AA with not many participants doing active trading, resulting in lower trading volumes compared to the government securities market. Thus, we can say that in spite of impressive increase in the total outstanding amount, depth of the corporate bond market remains relatively shallow. The daily trading volumes in the corporate bond market range between Rs. 8,000-10,000 crores on an average which pales in comparison to the daily average trading volumes in government securities market of Rs. 50,000-70,000 crores. Also, the corporate bond market remains an OTC market compared to the screen-based market in G-secs, which impacts price discovery, especially in lower rated bonds. Thus, we need to increase liquidity in the secondary market and along with it make the secondary market price discovery more efficient. Q) 2025 has seen record-breaking corporate bond issuances. What factors are driving this surge in new issuance? A) We have seen a decent increase in primary market activity this year. This is mostly driven by lower interest rates with issuers looking to lock in the current attractive yields. Majority of the issuance has been from NBFCs and PSUs. Q) The US is currently grappling with a growing debt crisis. How do you see this impacting global bond markets? A) The US economy is facing a huge debt challenge with elevated fiscal deficit. The rising debt burden and the Tariff issue has fuelled the narrative of de-dollarisation, leading to a search for diversification away from the US dollar/Bonds. Though, at present, this has not led to a meaningful flow away from US bond markets but can have potentially far-reaching consequences for US assets and can benefit emerging market assets. Given the fact that higher debt/fiscal deficit in US, will lead to US yields staying elevated, the yield curve can remain/become steeper including in the case of emerging markets . Q) Issuance of ultra-long-term US Treasury bonds has slowed down. What's driving this trend? A) The need to reduce the pressure on long end bond yields in US has led to more issuance at the shorter end and this trend may continue in the near term.
