The Indian companies raised a record 6.6 trillion rupees ($77.1 billion) through local-currency notes in the first half of the year, driven by falling interest rates and aggressive liquidity infusions.
The rush in rupee bond issuances is expected to slow down as the Reserve Bank of India shifts towards a neutral policy stance and economic growth prospects moderate, with rising headwinds from trade and geopolitics.
Yields on Indian debt have started to climb after reaching three-year lows, with inquiries for bond fundraisings increasing due to abundant liquidity and cheaper borrowing costs, leading to a surge in corporate bond sales.
However, uncertainties in the global market and reduced capital spending due to slower economic growth may impact corporate bond sales in the second half of the year, with companies potentially opting for loans over bonds as banks lower lending rates.