Build a corporate bond market that compliments our equity market: Sebi Whole Time Member
by Prashant Kapadia/NHN
Mumbai, 19th September, 2025: The Securities and Exchange Board of India (SEBI) today emphasized that for stable, deep and resilient markets, a robust corporate bond market should be built that would complement India’s equity market. Maybe we should explore ways where we allow corporate bond traits to happen with the same kind of efficiency and effectiveness that happens in equity markets,” said Mr. Ananth Narayan G, Whole Time Member, SEBI while speaking at the Assocham’s 8th Annual Conclave Corporate Bond Market.
He also said, “We must also nurture and spread awareness about alternative asset classes such as REITs, Munis (municipal bonds) and commodities and build a balanced financing ecosystem worthy of India’s growth ambitions.”
While stressing on the need to deepen and popularise trading in corporate bond markets, the Sebi Whole Time Member said, ” But I do think we possibly need to inculcate that culture a lot more”. Mr. Ananth also indicated that corporate bond indices are likely on the cards to encourage derivative trading in it. “We’ve talked about Credit Default Swaps (CDSs), but we are now working with other regulators to see how we actually popularise trading in corporate bond indices, which might lead to more awareness around the particular markets. Many of these proposals may not pertain directly to Sebi, but I would encourage Assocham to share your collective thoughts with us, given the constructive dialogue that is ongoing between different regulators and policymakers.”
On Municipal bonds, the Sebi Whole Time Member highlighted that there have been only 16 issuances through municipal bonds aggregating Rs 3,100 crore from 2017 till date. “Municipal bonds are especially vital but clearly we have a lot more to do. We at Sebi are evangelical about municipal bonds but a lot of collective work has to happen here,” added Mr. Ananth.
Speaking on pension funds emerging as a vital player in India’s development, Mr. S. Ramann, Chairperson, Pension Fund Regulatory and Development Authority (PFRDA), said, “So while public expenditure remains indispensable, the government alone cannot underwrite the vast financing required for India’s development. Pension funds have emerged as a vital actor in this landscape, along with insurance funds. The pension funds hold about 3.5 trillion in corporate debt as on date. Now, what we’re really saying is that out of this, about three and a half trillion, something like 70%, 2.5 trillion is into long term sectors like energy transport, water and social infrastructure. Nine out of 10 pension funds allocate more than half of their corporate bond portfolios to such long gestation projects, reflecting the natural alignment of retirement savings with infrastructure financing.
On countries encouraging participation of pension funds into bond markets, Mr. Ramann said, “Overseas Countries like South Korea and Brazil have deepened their bond markets by actively encouraging participation from pension funds and insurance. And I can assure this audience that at least from the pension fund side, we are certainly working very actively towards improving and sustaining the growth of the corporates of India.”
Pradeep Ramakrishnan – Executive Director, International Financial Services Centres Authority (IFSCA), said, “I am pleasantly surprised that we now have 40 online bond platforms, which have helped improve retail participation in India’s bond market. The shallowness that once defined this market has to some extent been broken and that is a positive development because for long the bond market was always looked upon as a tax-saving instrument and once that incentive was withdrawn, retail interest almost vanished. Today, thanks to these platforms, the bond market is becoming more transparent and accessible.
At the same time, I am happy to share that at GIFT City, the bond market has quite taken off. It has become the preferred destination for Indian corporates for ECBs and international borrowings with issuances across 15 currencies. We have already seen almost 150–160 issues, raising nearly $70 billion and in the sustainable finance space alone, close to 50–60 issues of green, social and sustainabilitylinked bonds, amounting to $16–17 billion. By adopting credible international taxonomies rather than reinventing the wheel, we are ensuring both issuers and investors have a trusted framework. With this momentum, GIFT City is steadily positioning itself as a hub for global capital flows and sustainable finance.”
Nipa Sheth – Chairperson, ASSOCHAM National Council on Corporate Bond Market and Founder & Director, Trust Group, said, “The corporate bond market in India holds immense promise to become a cornerstone of our nation’s economic journey towards Viksit Bharat 2047. We all recognise that the financing needs for infrastructure alone are projected at over Rs. 143 lakh crore and no single channel can bear that responsibility. A deeper, more liquid and inclusive bond market is therefore critical not only to diversify funding sources and reduce dependence on bank credit, but also to strengthen market stability and resilience. The path ahead lies in broadening retail participation by promoting financial literacy, simplifying digital access and creating retail-friendly products. It requires lowering issuance costs through credit enhancement mechanisms, improving governance and disclosure practices and ensuring consistent regulatory coordination between SEBI, RBI and exchanges. Equally important is the development of a vibrant secondary market, with market makers, efficient settlement systems and better price discovery.
“Globally, our equity markets rank among the top four, but our debt markets still lag behind. With reforms, improved credit ratings and inclusion in global indices such as JP Morgan’s Emerging Market Index, India is well-positioned to attract more foreign investors and align its bond markets with international standards. In the years ahead, a robust corporate bond market will not only provide longterm financing for infrastructure but also build resilience, foster innovation and strengthen India’s global competitiveness. This is not just about markets—it is about building the financial foundation for a stronger, sustainable and inclusive economy,” added Sheth.
Aditi Mittal – Co-Chairperson, National Council on Corporate Bond Market, ASSOCHAM & Director, A.K. Group, said, “India’s debt market today stands at $2.78 trillion and corporate bonds contribute more than 22% of the size, approximately $627 billion as per FY 2024-25 which is 13.42% higher than FY 2023-24. Corporate bonds are an essential component of capital market as they help companies raise funds beyond traditional bank loans and offer investors an alternative to mutual funds and bank deposits. According to NSDL, 5,700 companies tapped the corporate bond market in 2024 and already 3,237 corporates have issued year to date in 2025, underscoring a steady and stable pipeline. In 202425, traded volume reached ₹17.1 lakh crore, approximately $200 billion, 24.5% higher than last year. In the first four months of FY 2025-26, the traded volume has already touched 8.47 lakh crore, a growth of 48.5% with trade counts indicating a 74% rise signalling sharp acceleration in participation, especially from non-conventional investors. The corporate bond market is not just a financial segment, it’s a growth engine that can power business expansions, channel household savings into productive use towards Viksit Bharat and build a more inclusive financial system.”