Lower bank participation hits corp bond issuances

AFTER A STRONG start earlier this year, the corporate bond market has slowed down as rising yields and weak sentiment dampened activity.

- CHRISTINA TITUS

According to market participants, the total issuances in 2025 may be lower than last year.

"I had expected bond issuances to rise by about 10% this year, but without stronger participation from banks, volumes could instead decline by a similar margin," said Venkatakrishnan Srinivasan, founder and managing partner, Rockfort Fincap.

He added that overall bond supply this year may hover around ₹11 lakh crore, or even fall below the last year’s level. For meeting funding needs, many banks may prefer alternatives such as qualified institutional placements (QIPs). With pricing conditions still tight, fresh issuances could come at higher costs in the 7.20-7.25% range, which might further deterthem.