Surge in Private Sector Bond Investments in FY25, Reports RBI
Pvt companies' bond investments jump multi-fold in FY25: RBI
News 18
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Private sector companies in India significantly increased their investments in bonds and debentures, reaching ₹35,981 crore in FY25, up from just ₹224 crore the previous year. This surge coincided with a rise in corporate bond issuances to ₹9.87 lakh crore, driven by favorable market conditions and foreign investor interest.
- 01Private companies' bond investments rose to ₹35,981 crore in FY25 from ₹224 crore in FY24.
- 02Corporate bond issuances increased to ₹9.87 lakh crore in FY25.
- 03Foreign investment in Indian bonds surged after JP Morgan and Bloomberg Bond Index inclusions.
- 04Investments in equities fell by 62.25% to ₹59,945 crore in FY25.
- 05External funding sources accounted for 53.6% of total funds in FY25.
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According to the Reserve Bank of India (RBI), private sector companies' investments in bonds and debentures skyrocketed to ₹35,981 crore in the fiscal year 2024-25, a dramatic increase from just ₹224 crore in the previous year. This growth was accompanied by a rise in corporate bond issuances, which reached ₹9.87 lakh crore compared to ₹8.38 lakh crore in FY24. The surge in bond investments is attributed to increased foreign interest following the inclusion of Indian government securities in the JP Morgan index and later the Bloomberg Bond Index. These developments have positively influenced bond prices, making them an attractive investment option. Conversely, investments in equity instruments fell sharply by 62.25% year-on-year to ₹59,945 crore, and mutual fund investments also decreased to ₹3,656 crore from ₹6,700 crore in FY24. The share of external funding sources in total funds rose to 53.6%, reflecting a shift in financing dynamics for private companies.
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The surge in bond investments indicates a growing confidence in the Indian bond market, which could lead to more stable funding for private companies and potentially lower borrowing costs.
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