Latest news with #RajkumarSubramanian
Time of India
4 days ago
- Business
- Time of India
Resurgence of India rate-cut wagers revives foreign investor interest in bonds
Foreign appetite for Indian government bonds is back, with inflows picking up steadily over the last month, as investors gauge fresh expectations of a rate cut by the Reserve Bank of India as early as August. The RBI cut rates by a larger-than-expected 50 basis points in June and changed the stance to "neutral", prompting investors to bet on a prolonged pause. Explore courses from Top Institutes in Please select course: Select a Course Category PGDM Data Science Public Policy Management Product Management Project Management CXO Digital Marketing Data Analytics Leadership Others healthcare Design Thinking Artificial Intelligence others Finance MBA Cybersecurity MCA Technology Degree Data Science Healthcare Skills you'll gain: Financial Analysis & Decision Making Quantitative & Analytical Skills Organizational Management & Leadership Innovation & Entrepreneurship Duration: 24 Months IMI Delhi Post Graduate Diploma in Management (Online) Starts on Sep 1, 2024 Get Details by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Gold Is Surging in 2025 — Smart Traders Are Already In IC Markets Learn More Undo But a sharp drop in June retail inflation has some investors reassessing the likelihood of another rate cut. Bonds Corner Powered By Resurgence of India rate-cut wagers revives foreign investor interest in bonds Foreign investors are showing renewed interest in Indian government bonds, driven by expectations of an upcoming rate cut by the Reserve Bank of India as early as August. Subdued inflation and persistent growth concerns are fueling these expectations. Over the past month, foreign investors have net purchased 129 billion rupees in Indian bonds. Three Indian infra investment trusts eye $500 million debt in coming weeks, sources say Grip Invest launches auto compounding investment product for bond investors Despite RBI's rate cuts, Indian G-Sec yields remain range-bound due to US yield pressures, says Rajkumar Subramanian US Treasury pullback from long-term bonds signals policy divergence, says Vishal Goenka Browse all Bonds News with The RBI could implement a modest 25 basis point cut in August if inflation remains subdued and growth concerns persist, said Singapore-based Manish Bhargava, CEO of Straits Investment Management, adding that bond yields are attractive at current levels. Over the last one month, foreign investors have net bought 129 billion rupees ($1.5 billion) of Indian bonds linked to global indexes after selling more than 330 billion rupees in the first two-and-a-half months of the financial year that started on April 1, clearing house data showed. Live Events Analysts said concerns on the growth front are also likely to prompt the central bank to lower rates further. With recent high-frequency data disappointing and indicating the possibility of a further slowdown in growth, "there is potential for more support from the RBI further down the line," said London-based Giulia Pellegrini, lead portfolio manager, emerging market debt at AllianzGI. India's overall economic fundamentals remain solid, keeping the country on investors' radar, she said. A wider gap between interest rates in India and the U.S. would add to the appeal of Indian debt, investors said. That's why a Federal Reserve rate cut could act as a positive catalyst for Indian bonds, as they have historically helped local currency debt markets, said Nigel Foo, Singapore-based head of Asian fixed income at First Sentier Investors. However, current Indian bond yields are lower than where they were in the past at similar policy rate levels, and so are relatively unattractive, he added. The 10-year U.S. yield was around 4.35%, with the Fed expected to cut rates by at least 50 bps in 2025. The Indian 10-year benchmark bond yield was at 6.30%. "India's local debt story remains very compelling on both FX and rates," said Jean‑Charles Sambor, head of emerging markets debt at TT International Asset Management in London, who expects bond yields to decline through this year and next, and finds the middle of the yield curve attractive. ($1 = 86.2470 Indian rupees)
Economic Times
4 days ago
- Business
- Economic Times
Despite RBI's rate cuts, Indian G-Sec yields remain range-bound due to US yield pressures, says Rajkumar Subramanian
Despite a cumulative 100 basis points of rate cuts by the Reserve Bank of India between February and June 2025, Indian government bond yields have remained surprisingly stable. According to Rajkumar Subramanian, Head – Product & Family Office at PL Wealth, the benchmark 10-year G-Sec yield has stayed range-bound between 6.25% and 6.45% from April to July, reflecting muted monetary transmission. He attributes this rigidity largely to external pressures, particularly elevated U.S. Treasury yields driven by fiscal concerns and the Federal Reserve's ongoing balance sheet tightening. These global headwinds, he notes, are outweighing domestic policy easing, forcing investors to reassess duration risk and shift toward safer, shorter-term instruments. Edited Excerpts – ADVERTISEMENT Q) How would you describe the current size and depth of the corporate bond market in India?A) India's corporate bond market has evolved into a substantial segment of the broader financial ecosystem, with outstanding issuances valued at over ₹53.6 lakh crore, representing nearly a quarter of the country's total bond market as per RBI's June 2025 data. While this reflects impressive growth in absolute terms, the market's depth remains limited. Institutional investors—mutual funds, insurance companies, banks, and pension funds—dominate with over 95% of holdings. Retail participation is minimal, constrained by historical barriers such as high minimum investment thresholds and restricted access to transparent pricing. Despite a robust primary issuance environment, the secondary market remains thin, with average monthly turnover hovering below 4% of outstanding trades continue to dominate, limiting liquidity and price discovery. While structural foundations are in place, enhanced transparency, broader investor inclusion, and deeper secondary activity are essential to transform the market into a more vibrant and inclusive capital-raising avenue. ADVERTISEMENT Q) What factors are driving the record-breaking surge in corporate bond issuances in 2025?A) Several converging factors have propelled corporate bond issuance in 2025 to unprecedented levels, with total fund-raising nearing ₹10 marks a significant shift in corporate funding dynamics. Lower interest rates—following 100 basis points of cumulative rate cuts by the RBI—created an attractive window for issuers to tap long-term capital at competitive costs. ADVERTISEMENT At the same time, narrowing spreads and abundant liquidity in the system further incentivized bond market access. Corporates have also displayed strong intent to finance capex and refinance high-cost legacy corporate capital expenditure has seen double-digit growth, underpinned by rising business confidence and stronger balance sheets. Issuers increasingly favour private placements, which offer streamlined execution. ADVERTISEMENT Notably, shorter-duration issuances (5 years) have seen a sharp uptick, reflecting both issuer and investor preferences amid interest rate volatility. Institutions such as mutual funds and insurers, seeking yields above traditional deposits, have remained active participants, supporting this supply these factors signal a more mature borrowing environment—where strategic capital planning, investor appetite, and regulatory headroom are converging in favour of bond financing. Q) How is the U.S. debt situation influencing global bond markets? ADVERTISEMENT A) The growing fiscal strain in the U.S.—driven by rising deficits and mounting concerns over debt sustainability—is increasingly influencing global bond Federal Reserve minutes highlight a cautious policy stance, with rates held steady and balance sheet normalization continuing through quantitative has kept long-end U.S. Treasury yields elevated, setting a higher benchmark for global sovereign and corporate yields. The steepening yield curve and elevated term premiums are prompting global investors to reassess duration risk and tighten allocations, particularly in emerging India, despite a cumulative 100 basis points of policy rate cuts by the RBI between February and June 2025, the benchmark 10-year G-Sec yield has remained range-bound at 6.25%–6.45% from April through July—signalling muted monetary divergence underscores the influence of external headwinds, including sustained U.S. rate pressures, geopolitical uncertainties, and risk-averse investor sentiment, which are outweighing the impact of domestic policy confidence in fiscal prudence erodes, investors are increasingly reallocating towards gold, shorter-duration debt, and high-grade corporate effect, the U.S. fiscal trajectory is no longer a local issue—it is reshaping global capital flows and repricing risk across markets. Q) Why has the issuance of ultra-long-term U.S. Treasuries slowed down recently? A) The reduction in ultra-long-term U.S. Treasury issuance is driven by a complex interplay of market sentiment, fiscal optics, and evolving policy priorities. Investor appetite for long-duration paper has waned amidst persistently high term premiums and volatile demand at recent yields on 30-year Treasuries edge closer to 5%, the risk-reward dynamic has become less favourable — particularly in a climate of uncertain inflation trajectory and geopolitical tensions. Fed communications have also reflected concerns around the balance sheet runoff's impact on market the central bank continues to unwind its holdings, reinvestment preferences now lean toward shorter maturities, indirectly weighing on the long-end parallel, the U.S. Treasury appears to be recalibrating its issuance strategy—emphasizing short- and medium-tenor securities to manage rollover risks, reduce interest costs, and retain flexibility amid fiscal demand normalizes and policy direction stabilizes, ultra-long bond issuance is likely to remain subdued. Q) What reforms could help deepen India's corporate bond market further? A) To unlock the full potential of India's corporate bond market, a combination of regulatory, structural, and operational reforms is broadening participation through lower issuance thresholds and flexible investment norms—especially for pension and insurance funds—can catalyse demand and supply. CRISIL estimates such measures could enable ₹4–7 lakh crore in additional issuance aligning the tax treatment of debt mutual funds with other asset classes—by restoring indexation benefits and revisiting long-term capital gains taxation—can improve their competitiveness and encourage greater retail and institutional participation in the bond recent initiatives like SEBI's 'Bond Central' platform are encouraging steps toward improving transparency, standardizing disclosures, and lowering the investment minimums to ₹10,000. This could meaningfully widen the retail investor base. Deepening the secondary market is equally critical. Encouraging market-making, credit default swap usage by funds, and establishing robust buyback frameworks will help address liquidity constraints. Finally, supporting securitization, especially for stressed assets, can develop a diversified risk-return spectrum within the fixed-income space. These reforms, implemented in tandem, can transform the current institutional-heavy landscape into a more inclusive, liquid, and dynamic market. (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
4 days ago
- Business
- Time of India
Despite RBI's rate cuts, Indian G-Sec yields remain range-bound due to US yield pressures, says Rajkumar Subramanian
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Despite a cumulative 100 basis points of rate cuts by the Reserve Bank of India between February and June 2025, Indian government bond yields have remained surprisingly to Rajkumar Subramanian , Head – Product & Family Office at PL Wealth, the benchmark 10-year G-Sec yield has stayed range-bound between 6.25% and 6.45% from April to July, reflecting muted monetary attributes this rigidity largely to external pressures, particularly elevated U.S. Treasury yields driven by fiscal concerns and the Federal Reserve's ongoing balance sheet global headwinds, he notes, are outweighing domestic policy easing, forcing investors to reassess duration risk and shift toward safer, shorter-term instruments. Edited Excerpts –A) India's corporate bond market has evolved into a substantial segment of the broader financial ecosystem, with outstanding issuances valued at over ₹53.6 lakh crore, representing nearly a quarter of the country's total bond market as per RBI's June 2025 this reflects impressive growth in absolute terms, the market's depth remains limited. Institutional investors—mutual funds, insurance companies, banks, and pension funds—dominate with over 95% of participation is minimal, constrained by historical barriers such as high minimum investment thresholds and restricted access to transparent pricing. Despite a robust primary issuance environment, the secondary market remains thin, with average monthly turnover hovering below 4% of outstanding trades continue to dominate, limiting liquidity and price discovery. While structural foundations are in place, enhanced transparency, broader investor inclusion, and deeper secondary activity are essential to transform the market into a more vibrant and inclusive capital-raising avenue.A) Several converging factors have propelled corporate bond issuance in 2025 to unprecedented levels, with total fund-raising nearing ₹10 marks a significant shift in corporate funding dynamics. Lower interest rates—following 100 basis points of cumulative rate cuts by the RBI—created an attractive window for issuers to tap long-term capital at competitive the same time, narrowing spreads and abundant liquidity in the system further incentivized bond market access. Corporates have also displayed strong intent to finance capex and refinance high-cost legacy corporate capital expenditure has seen double-digit growth, underpinned by rising business confidence and stronger balance sheets. Issuers increasingly favour private placements, which offer streamlined shorter-duration issuances (<5 years) have seen a sharp uptick, reflecting both issuer and investor preferences amid interest rate volatility. Institutions such as mutual funds and insurers, seeking yields above traditional deposits, have remained active participants, supporting this supply these factors signal a more mature borrowing environment—where strategic capital planning, investor appetite, and regulatory headroom are converging in favour of bond financing.A) The growing fiscal strain in the U.S.—driven by rising deficits and mounting concerns over debt sustainability—is increasingly influencing global bond Federal Reserve minutes highlight a cautious policy stance, with rates held steady and balance sheet normalization continuing through quantitative has kept long-end U.S. Treasury yields elevated, setting a higher benchmark for global sovereign and corporate yields. The steepening yield curve and elevated term premiums are prompting global investors to reassess duration risk and tighten allocations, particularly in emerging India, despite a cumulative 100 basis points of policy rate cuts by the RBI between February and June 2025, the benchmark 10-year G-Sec yield has remained range-bound at 6.25%–6.45% from April through July—signalling muted monetary divergence underscores the influence of external headwinds, including sustained U.S. rate pressures, geopolitical uncertainties, and risk-averse investor sentiment, which are outweighing the impact of domestic policy confidence in fiscal prudence erodes, investors are increasingly reallocating towards gold, shorter-duration debt, and high-grade corporate effect, the U.S. fiscal trajectory is no longer a local issue—it is reshaping global capital flows and repricing risk across markets.A) The reduction in ultra-long-term U.S. Treasury issuance is driven by a complex interplay of market sentiment, fiscal optics, and evolving policy priorities. Investor appetite for long-duration paper has waned amidst persistently high term premiums and volatile demand at recent yields on 30-year Treasuries edge closer to 5%, the risk-reward dynamic has become less favourable — particularly in a climate of uncertain inflation trajectory and geopolitical tensions. Fed communications have also reflected concerns around the balance sheet runoff's impact on market the central bank continues to unwind its holdings, reinvestment preferences now lean toward shorter maturities, indirectly weighing on the long-end parallel, the U.S. Treasury appears to be recalibrating its issuance strategy—emphasizing short- and medium-tenor securities to manage rollover risks, reduce interest costs, and retain flexibility amid fiscal demand normalizes and policy direction stabilizes, ultra-long bond issuance is likely to remain subdued.A) To unlock the full potential of India's corporate bond market, a combination of regulatory, structural, and operational reforms is broadening participation through lower issuance thresholds and flexible investment norms—especially for pension and insurance funds—can catalyse demand and supply. CRISIL estimates such measures could enable ₹4–7 lakh crore in additional issuance aligning the tax treatment of debt mutual funds with other asset classes—by restoring indexation benefits and revisiting long-term capital gains taxation—can improve their competitiveness and encourage greater retail and institutional participation in the bond recent initiatives like SEBI's 'Bond Central' platform are encouraging steps toward improving transparency, standardizing disclosures, and lowering the investment minimums to ₹10,000. This could meaningfully widen the retail investor base. Deepening the secondary market is equally critical. Encouraging market-making, credit default swap usage by funds, and establishing robust buyback frameworks will help address liquidity supporting securitization, especially for stressed assets, can develop a diversified risk-return spectrum within the fixed-income space. These reforms, implemented in tandem, can transform the current institutional-heavy landscape into a more inclusive, liquid, and dynamic market.(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
6 days ago
- Business
- Time of India
Airport Firm GMR mulls rupee-bond sale of Rs 5,000 crore
GMR Airports Ltd . is considering a Rs 5,000 crore ($579 million) local-currency bond sale, according to people familiar with the matter, in what could be a record rupee issuance for India's second-largest private airport operator. The New Delhi-based company is considering to raise the funds through a note due in 18-months to three years and will use the proceeds to refinance existing debt, one of the people said, asking not to be identified as the details are private. The firm may aim to price the securities at about 10.5%, the person said. Explore courses from Top Institutes in Please select course: Select a Course Category healthcare Artificial Intelligence Healthcare Digital Marketing Operations Management Design Thinking Data Analytics Data Science Data Science Project Management Product Management Degree Technology Public Policy Cybersecurity MCA PGDM Finance MBA Others CXO Leadership Management others Skills you'll gain: Duration: 11 Months IIM Lucknow CERT-IIML Healthcare Management India Starts on undefined Get Details by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like A genetic disorder that is damaging his organs. Help my son Donate For Health Donate Now A representative for GMR Airports didn't respond to an email seeking comments. Bonds Corner Powered By Airport Firm GMR mulls rupee-bond sale of Rs 5,000 crore GMR Airports Ltd. is considering a Rs 5,000 crore ($579 million) local-currency bond sale, according to people familiar with the matter, in what could be a record rupee issuance for India's second-largest private airport operator. Buyers flee Japanese bonds as political, fiscal risks rise India bonds little changed as traders await fresh cues India's corporate bond market booms: Record Rs 10 trillion raised in corporate bonds in 2025, says Rajkumar Subramanian of PL Wealth India bonds flat as traders look ahead to RBI policy; liquidity ebbs Browse all Bonds News with The Economic Times earlier reported the company is looking to raise 57 billion rupees. The company is planning to tap the market as a cumulative 100-basis-point reduction by the central bank this year brings down borrowing costs. The fundraising underscores growth prospects for India's aviation sector and comes at a time when GMR is looking to expand its footprint in the country. Live Events GMR, along with the country's largest airport operator Adani Airport Holdings Ltd., is expected to be among the top contenders as the government looks to privatize 11 airports. If the deal goes through, it will be GMR's largest-ever rupee offering, according to data compiled by Bloomberg. It has three local-currency bonds amounting to 50 billion rupees maturing next year. Care Ratings last month upgraded GMR Airports' loans and bonds to A from BBB+ and expects the firm's business to be supported by favorable outlook for the airport sector. GMR's unit Delhi International Airport Ltd. is also planning to issue 10 billion rupees worth of bonds, according to people familiar with the matter.
Time of India
6 days ago
- Business
- Time of India
India's corporate bond market booms: Record Rs 10 trillion raised in corporate bonds in 2025, says Rajkumar Subramanian of PL Wealth
India's corporate bond market has hit a historic milestone in 2025, with total fundraising nearing ₹10 trillion—a record high that signals a significant shift in corporate financing strategies. According to Rajkumar Subramanian, Head of Product & Family Office at PL Wealth , this surge has been fueled by a combination of lower interest rates, abundant liquidity, and rising capital expenditure by corporates. The trend highlights a maturing debt market, where private placements, shorter-duration issuances, and institutional investor appetite are driving growth. However, Subramanian also notes that despite this boom, challenges such as limited retail participation and a shallow secondary market still need to be addressed to unlock the market's full potential. 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 Finance Technology Data Science healthcare Degree Leadership PGDM Healthcare Management MCA others MBA Product Management Public Policy CXO Digital Marketing Others Artificial Intelligence Project Management Design Thinking Operations Management Data Science Data Analytics Cybersecurity Skills you'll gain: Duration: 9 Months IIM Calcutta SEPO - IIMC CFO India Starts on undefined Get Details Skills you'll gain: Duration: 7 Months S P Jain Institute of Management and Research CERT-SPJIMR Fintech & Blockchain India Starts on undefined Get Details by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Indonesia: Unsold Sofas at Bargain Prices (Prices May Surprise You) Sofas | Search Ads Search Now Undo A) India's corporate bond market has evolved into a substantial segment of the broader financial ecosystem, with outstanding issuances valued at over ₹53.6 lakh crore, representing nearly a quarter of the country's total bond market as per RBI's June 2025 data. While this reflects impressive growth in absolute terms, the market's depth remains limited. Institutional investors—mutual funds, insurance companies, banks, and pension funds—dominate with over 95% of holdings. Bonds Corner Powered By India's corporate bond market booms: Record Rs 10 trillion raised in corporate bonds in 2025, says Rajkumar Subramanian of PL Wealth India's corporate bond market is experiencing unprecedented growth in 2025, nearing ₹10 trillion due to lower interest rates and increased capital expenditure. While institutional investors dominate, reforms are needed to enhance retail participation and secondary market liquidity. U.S. fiscal concerns influence global bond yields, impacting India despite domestic rate cuts. India bonds flat as traders look ahead to RBI policy; liquidity ebbs Weak Yen and BoJ Policy Anchor Japanese Bond Market NBFCs lead India's corporate bond market as private placements dominate: Jiraaf Bond Analyser Japan bonds fall on coalition's poll defeat as market reopens after holiday Browse all Bonds News with Retail participation is minimal, constrained by historical barriers such as high minimum investment thresholds and restricted access to transparent pricing. Live Events Despite a robust primary issuance environment, the secondary market remains thin, with average monthly turnover hovering below 4% of outstanding volumes. Over-the-counter trades continue to dominate, limiting liquidity and price discovery. While structural foundations are in place, enhanced transparency, broader investor inclusion, and deeper secondary activity are essential to transform the market into a more vibrant and inclusive capital-raising avenue. Q) What factors are driving the record-breaking surge in corporate bond issuances in 2025? A) Several converging factors have propelled corporate bond issuance in 2025 to unprecedented levels, with total fund-raising nearing ₹10 trillion. This marks a significant shift in corporate funding dynamics. Lower interest rates—following 100 basis points of cumulative rate cuts by the RBI—created an attractive window for issuers to tap long-term capital at competitive costs. At the same time, narrowing spreads and abundant liquidity in the system further incentivized bond market access. Corporates have also displayed strong intent to finance capex and refinance high-cost legacy debt. Non-financial corporate capital expenditure has seen double-digit growth, underpinned by rising business confidence and stronger balance sheets. Issuers increasingly favour private placements, which offer streamlined execution. Notably, shorter-duration issuances (<5 years) have seen a sharp uptick, reflecting both issuer and investor preferences amid interest rate volatility. Institutions such as mutual funds and insurers, seeking yields above traditional deposits, have remained active participants, supporting this supply glut. Together, these factors signal a more mature borrowing environment—where strategic capital planning, investor appetite, and regulatory headroom are converging in favour of bond financing. Q) How is the U.S. debt situation influencing global bond markets? A) The growing fiscal strain in the U.S.—driven by rising deficits and mounting concerns over debt sustainability—is increasingly influencing global bond markets. Recent Federal Reserve minutes highlight a cautious policy stance, with rates held steady and balance sheet normalization continuing through quantitative tightening. This has kept long-end U.S. Treasury yields elevated, setting a higher benchmark for global sovereign and corporate yields. The steepening yield curve and elevated term premiums are prompting global investors to reassess duration risk and tighten allocations, particularly in emerging markets. In India, despite a cumulative 100 basis points of policy rate cuts by the RBI between February and June 2025, the benchmark 10-year G-Sec yield has remained range-bound at 6.25%–6.45% from April through July—signalling muted monetary transmission. This divergence underscores the influence of external headwinds, including sustained U.S. rate pressures, geopolitical uncertainties, and risk-averse investor sentiment, which are outweighing the impact of domestic policy easing. As confidence in fiscal prudence erodes, investors are increasingly reallocating towards gold, shorter-duration debt, and high-grade corporate instruments. In effect, the U.S. fiscal trajectory is no longer a local issue—it is reshaping global capital flows and repricing risk across markets. Q) Why has the issuance of ultra-long-term U.S. Treasuries slowed down recently? A) The reduction in ultra-long-term U.S. Treasury issuance is driven by a complex interplay of market sentiment, fiscal optics, and evolving policy priorities. Investor appetite for long-duration paper has waned amidst persistently high term premiums and volatile demand at recent auctions. As yields on 30-year Treasuries edge closer to 5%, the risk-reward dynamic has become less favourable — particularly in a climate of uncertain inflation trajectory and geopolitical tensions. Fed communications have also reflected concerns around the balance sheet runoff's impact on market liquidity. Although the central bank continues to unwind its holdings, reinvestment preferences now lean toward shorter maturities, indirectly weighing on the long-end segment. In parallel, the U.S. Treasury appears to be recalibrating its issuance strategy—emphasizing short- and medium-tenor securities to manage rollover risks, reduce interest costs, and retain flexibility amid fiscal headwinds. Until demand normalizes and policy direction stabilizes, ultra-long bond issuance is likely to remain subdued. Q) What reforms could help deepen India's corporate bond market further? A) To unlock the full potential of India's corporate bond market, a combination of regulatory, structural, and operational reforms is essential. First, broadening participation through lower issuance thresholds and flexible investment norms—especially for pension and insurance funds—can catalyse demand and supply. CRISIL estimates such measures could enable ₹4–7 lakh crore in additional issuance capacity. Second, aligning the tax treatment of debt mutual funds with other asset classes—by restoring indexation benefits and revisiting long-term capital gains taxation—can improve their competitiveness and encourage greater retail and institutional participation in the bond market. Third, recent initiatives like SEBI's 'Bond Central' platform are encouraging steps toward improving transparency, standardizing disclosures, and lowering the investment minimums to ₹10,000. This could meaningfully widen the retail investor base. Deepening the secondary market is equally critical. Encouraging market-making, credit default swap usage by funds, and establishing robust buyback frameworks will help address liquidity constraints. Finally, supporting securitization, especially for stressed assets, can develop a diversified risk-return spectrum within the fixed-income space. These reforms, implemented in tandem, can transform the current institutional-heavy landscape into a more inclusive, liquid, and dynamic market.
