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Informist, Wednesday, Oct. 29, 2025

 

MUMBAI – Corporate bond issuances are likely to remain tepid in 2025-26 (Apr-Mar) compared with last year, treasury heads of major banks including ICICI Bank and HDFC Bank said at the BS BFSI Summit on Wednesday. Last year's corporate bond issuances totalled over INR 11 trillion and market experts expect a lower amount of bond issuances in FY26, they said.  

 

The decline in corporate bond issuances is driven by significantly cheaper rates in the loan market, making it more attractive for corporates to access loans, the officials said. "Last year, we saw that the bank issuances were very strong, especially in capital issuances and infra bonds," said Shailendra Jhingan, head-treasury and economic research, ICICI Bank. "But it was more tactical on the part of corporates, NBFCs (non-baking financial companies) and mostly PSU (public sector undertakings) issuers."

 

HDFC Bank Treasury head Arup Rakshit attributed the slowdown in bond issuances to lower interest rates, which have made loans--external benchmark lending rate loans--more attractive compared with corporate bonds. "The repo rate is at 5.50%, therefore EBLR (external benchmark lending rate) loans look far more attractive compared to corporate loans at the current level. So I think that trend is pretty much evident," Rakshit said.

 

When asked about the Reserve Bank of India's foreign exchange intervention strategy amid high US tariffs, Rakshit said that the RBI was unlikely to use the exchange rate as a tool to promote export competitiveness, emphasising that currency management was focused on moderating volatility rather than influencing trade.

 

"I think export competitiveness will come in from how India negotiates on other FTAs (free trade agreements), other jurisdictions, other geographies...and if you see the last month's and quarter's data, India's exports to other geographies have picked up. So it will be more from that perspective" Rakshit said. "I do not see a currency being used to give a benefit to the exporters. If at all if something has to come through, it has to come through some other route like earlier there used to be those special interest rates being given by the Government of India. But I do not see currency being used as that," he said.  End

 

Reported by Vaishali Tyagi and Kabir Sharma

Edited by Akul Nishant Akhoury

 

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