Corporate bonds (CB) occupy a meagre 8 per cent share in India’s overall corporate debt (Chart 4), suggesting that banks still dominate corporate finance. Though India’s CB market has tripled since 2012, it is still not deep enough (Chart 5).
To add to this, CBs have become riskier in recent months. Yields on AAA-rated corporate bonds have not declined in line with fall in G-Sec yields and repo rate (Chart 6). The former’s spread over G-Sec yields has risen from 77 basis points to 139 bps in nine months.
The external commercial borrowing is now growing at a slower pace than before. Cumulatively, it is at $200 billion for two years (Chart 7).
StatsGuru is a weekly feature. Every Monday, Business Standard guides you through the numbers you need to know to make sense of the headlines | Compiled by BS Research Bureau