Corporate bonds off to a slow start. Bank bonds may come to the rescue.

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₹1.6 trillion from ₹2.42 trillion during the corresponding period of 2023-24, show data from BSE and NSE. The total number of issues fell to 247 from 287. The total amount of corporate bonds raised through the EBP also saw a sharp decline sequentially.

In the January-March quarter, corporate bond issuances through EBP stood at ₹2.39 trillion. “This drop was largely influenced by the absence of major issuers like HDFC and a one-off large issue by Goswami Infratech in the first quarter of last year. Additionally, regular issuers such as public sector entities like (Power Finance Corp.) and Nabard have issued fewer bonds this fiscal year," said Venkatakrishnan Srinivasan, managing partner at Rockfort Fincap Llp, a financial advisory firm.

Nabard is the National Bank for Agriculture and Rural Development. Srinivasan, however, expects a turnaround in corporate bond issuances in the July-September quarterly, mostly supported by a large supply of bank bonds. “SBI has already raised ₹20,000 crore through infra bonds, and this will be followed by other major banks including Canara Bank, Bank of Baroda, Bank of India, and HDFC Bank, to name a few," he said.

A spokesperson of the Securities and Exchange Board of India didn’t respond to emailed queries. “Despite attractive yields and strong investor appetite for long-term bond instruments from top-rated private sector issuers, interest has been somewhat subdued since April this fiscal year," Srinivasan added. “Issuers seem to have either postponed their growth plans due to the election or waited for yields to come down in anticipation of a reversal in monetary policy and the beginning of interest rate cuts." In June, the Reserve Bank of India's Monetary Policy Committee decided to