No infra bond issuances in FY26

After record volumes in FY25, infrastructure bonds have lost sheen on low credit demand

- SUBRATA PANDA & ANJALI KUMARI

Infrastructure bonds, which were relied upon the most in 2024-25 (FY25) by commercial banks to raise funds through the domestic debt capital market amid lagging deposit growth, seem to have lost their sheen in FY26. So far in FY26, no bank has tapped the domestic debt capital market to raise funds via infra bonds, and the expectation is that the amount raised through this route will be significantly lower than that last year, unless credit demand picks up. Only Bank of India has taken board approval to raise funds via infra bonds.

According to data from rating agency Icra, banks—state-owned and private sector lenders—raised ₹94,490 crore through infrastructure bonds in FY25. In FY24, through this route, they raised ₹71,080 crore; in FY23 ₹29,620 crore, and in FY22 ₹27,200 crore.

"The need for long-term infra funding appears to have softened," said an official with a private sector bank.