Primary market
The Indian debt market is likely to grow significantly, with a wider range of investment opportunities emerging for domestic and foreign investors. Mutual, insurance and pension funds play a vital role in supporting bond markets by providing liquidity, facilitating access for retail investors and mobilising public savings.
Stable regulatory framework, improved market infrastructure, and increased investor participation are very crucial for sustaining the growth & development of the corporate bond market. Regulatory bodies like SEBI and RBI have provided measures to promote bond market development and improve transparency. Over the last five years, corporate bond market has grown ~45% in terms of issuances from FY21 – FY25. The overall trend indicates a growth trajectory and is expected to continue growing. The financial year 2026 (till Dec’25) accounted issuances amounting to Rs. 7.94 lakh crores. Economic uncertainties and changing interest rate expectations might cause temporary slowdowns in primary market issuances of corporate bonds.
Secondary market
Average daily trading to outstanding ratio sees slight improvement:
Average daily secondary volumes have seen pick up by ~27% in this fiscal upto December 2025. Currently the average daily trading/outstanding ratio stands at 0.20% which is much lower as compared to government securities market. A significant portion of trades in the secondary market for corporate bonds happens over the counter (OTC). This lacks transparency of exchange-traded deals, leading to information asymmetry and shoddy price discovery, which reduce investor confidence. Also, only AAA-rated bonds or select top-rated issuers are liquid. The absence of risk appetite beyond top-rated bonds is a key impediment.
Retail trade volumes grow by 3.5x
The regulatory framework for Online Bond Platform Providers (OBPP), for boosting retail participation, became operational in November 2022. With the growth of OBPPs, retail investor participation in corporate bonds has been on an upswing. The total number of clients registered in OBPP segment hasnow increased to 5.6 lakh in fiscal 2025 from 3.5 lakh in fiscal 2024. Moreover, the monthly average retail volume has grown over the past four years (till March 10, 2026) to a CAGR of ~37%.
The significant jump in monthly average retail volumes in FY2026 signifies how retail investors have increased their participation due to regulatory framework ensuring investors’ safety, fair disclosures, reduction in minimum investment amount, and end-to-end digital access to bonds. This strong momentum indicates broader retail base where corporate bonds are beginning to emerge as a mainstream asset class for individual investors rather than a niche institutional product.
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