Archive · 25 Jun 2025
Investors Flock to Riskier Indian Corporate Bonds for Higher Yields
Imagine companies need money, so they issue bonds promising to pay back with interest.
Investors buy these bonds to earn money.
Recently, in India, the safest bonds don't pay as much, so investors are buying riskier bonds from companies with lower credit ratings.
These riskier bonds offer higher interest, but there's also a higher chance the company might not be able to pay back the money.
More investors are now buying these bonds through new online platforms.
Indian corporate bonds rated BBB and lower are experiencing increased investor interest.
Falling benchmark yields are pushing investors to seek higher returns in riskier bonds.
Issuances of BBB-rated bonds have significantly increased in recent years.
Online platforms are expanding access to riskier debt for wealthy individuals and institutions.
Market participants caution that higher yields come with meaningful credit risk.
- Who
- Investors, including wealthy individuals, and alternative funds
- What
- Increased interest in riskier Indian corporate bonds.
- When
- Recent months and fiscal years.
- Where
- India
- Why
- To pursue higher returns as benchmark yields decline.
- Benchmark 10-year G-Sec Yield
- 6.27% (as of Tuesday)
- Issuance of BBB-rated bonds in FY25
- 450
- Issuance of BBB-rated bonds in FY24
- 244
- Yield on BBB Issuances
- As high as 14-15%
- Spread on BBB issuances
- 600-700 basis points
