Corporate bond issues slip 6% so far in 2025 as high yields turn borrowers cautious

Subscribe to enjoy similar stories. Companies in India reduced borrowings through corporate bonds in the current financial year, as significant changes in global trade and stubborn domestic yields mostly blunted the Reserve Bank of India’s easing cycle.

Funds raised through corporate bonds declined by 6% on-year to ₹6.76 trillion in the first nine months of FY26, data from the Securities and Exchange Board of India showed, despite a 125-basis-point cut in policy rate and sustained liquidity support from the Reserve Bank of India (RBI). While 1,458 issuers tapped the debt market in the first nine months of this fiscal, a total of 1,219 borrowers raised ₹7.18 trillion through corporate bonds in the same period a year ago, according to Sebi data.

Market participants believe frontloading of borrowings in the April-June period, aided by expectations of imminent rate cuts and a sharp fall in bond yields ahead of RBI’s easing cycle, drove issuances in that period. However, momentum slowed sharply thereafter, with yields rising after US President Donald Trump imposed 50% tariffs on India in August, and the rupee continued to depreciate.

“After an all-time high bond issuance in Q1FY2026, the bond issuance has remained tepid in Q2 and Q3 of the current financial year. The rise in yields on state government bonds driven by expectations of higher deficit, spilled over to corporate bond yields and took a toll on corporate bond issuance in Q2 FY2026," Anil Gupta, senior vice president and co-group head, financial sector rating at Icra, said.