Indian Corporate Bond Sales Slow as Rates Hit 7-Year High
Indian companies are reducing bond issuances as AAA-rated yields climb above 8% for the first time since early 2019. Firms raised 1.07 trillion rupees in April and May, marking the lowest start to a fiscal year since 2022 as borrowers shift toward bank loans and short-term funding options.
India corporate bond issuance is slowing as borrowing costs reached seven-year highs. AAA-rated bond yields in the two- to five-year maturity bracket rose above 8% last week, the highest level since early 2019. Higher rates are forcing firms to pivot toward bank loans to avoid locking in expensive long-term debt.
### Yield Spikes Dampen Issuance Volume Benchmark yields tracked by LONDON STOCK EXCHANGE GROUP show two-year AAA corporate bond yields surged 40 basis points in May. Yields for three- to five-year maturities rose 30 basis points during the same period. Investors and merchant bankers attribute the rise to expectations of tighter liquidity from the Reserve Bank of India.
