Archive · 26 Jul 2025
Infrastructure Bond Issuances Decline in FY26 Due to Market Shifts
Imagine banks need money to lend, like borrowing from a friend.
Infrastructure bonds were popular last year, but now banks don't need them as much.
They raised lots of money that way before.
This year, they have enough money from other places because not as many people are borrowing.
Also, other organizations are lending directly.
Plus, banks want to strengthen their financial health by using other types of bonds instead of these ones.
So, for now, there are fewer infrastructure bonds being issued.
Banks have not issued infrastructure bonds in FY26, unlike in the previous year.
Banks raised Rs 94,490 crore through infrastructure bonds in FY25.
Credit growth has slowed down, while deposits are growing faster in FY26.
Abundant systemic liquidity and preference for capital-eligible instruments are factors.
Some anticipate banks may issue bonds in Q3 if credit growth increases.
- Who
- Commercial banks, rating agencies, and financial experts are involved.
- What
- Banks are not issuing infrastructure bonds in FY26.
- When
- The trend is observed in FY26, after a reliance on the bonds in FY25.
- Where
- The activity is within the domestic debt capital market.
- Why
- Due to slower credit growth, faster deposit growth, and other funding options.
- FY25 Infra Bond Issuance
- Rs 94,490 crore
- FY24 Infra Bond Issuance
- Rs 71,080 crore
- FY23 Infra Bond Issuance
- Rs 29,620 crore
- FY22 Infra Bond Issuance
- Rs 27,200 crore
- Credit Growth (Y-o-Y, June 27)
- 9.5%
- Deposit Growth (Y-o-Y, June 27)
- 10.1%