Corporate Bond Market Depth Crucial For Liquidity & Investor Participation: NITI Aayog CEO

(MENAFN- KNN India) New Delhi, Dec 12 (KNN) NITI Aayog CEO B.V.R. Subrahmanyam on Thursday released a detailed report titled 'Deepening the Corporate Bond Market in India' in New Delhi, outlining a roadmap to strengthen India's long-term financing ecosystem.

Subrahmanyam underscored the importance of a stronger corporate bond market in advancing India's Viksit Bharat vision, noting that deeper and more efficient capital markets are essential for mobilising long-term funds at scale.

“This report underscores how a deeper and more efficient corporate bond market will be central to enabling that transition by expanding market access, improving liquidity, and strengthening investor participation,” he said.

Assessment of Market Gaps

The report provides an in-depth review of the current landscape of India's corporate bond market, highlighting structural challenges that restrict its depth and vibrancy.

Despite steady growth over the past decade-reflected in rising outstanding issuances, regulatory improvements and greater investor interest-the market continues to face hurdles such as limited liquidity, a narrow investor base, and subdued secondary market activity.

Noting the significant untapped potential, the study points to the opportunity for corporate bonds to play a larger role in financing infrastructure, MSMEs, green and transition projects, and emerging sectors.

Reform Recommendations

“The recommendations outlined in this report offer a practical blueprint for improving capital market transparency, widening the investor base, supporting lower-rated issuers, and modernising market infrastructure in line with global practices,” Subrahmanyam said.

Drawing on global best practices, the report proposes a sequenced set of reforms to strengthen legal and regulatory frameworks, enhance market infrastructure, and improve transparency.

Key priorities include enabling greater issuance by mid-size companies, increasing participation from insurance, pension and retail investors, and expanding the range of instruments-including credit-enhanced bonds, long-tenor securities and sustainability-linked products.

It also recommends measures to boost liquidity through stronger market-making and repo facilities, along with leveraging digital tools such as tokenised bonds and integrated data systems.

(KNN Bureau)

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