Crisil expects corporate bond market to increase to Rs 60 lakh crore by 2023

Mumbai: Credit rating agency Crisil expects the supply of corporate bonds to increase to Rs 55 lakh crore to Rs 60 lakh crore by the end of fiscal 2023, double that of Rs 27.4 lakh crore seen at the end of fiscal 2018, led by increase bond issuances from the financial and infrastructure sectors.

However, the demand for these instruments is expected to be over Rs 53 lakh crore, led by retirement funds, insurance companies, mutual funds, foreign portfolio investors and others, and banks which means that there is a Rs 2 lakh crore to Rs 7 lakh crore gap between supply and demand.

In its year book on the Indian corporate bond market released on Wednesday, Crisil said that more measures are required to bridge this gap in the local corporate bond market. “To structurally bridge the demand-supply gap, we need a big step-up in investor awareness, better coordination across the ecosystem, continuation of regulatory reforms, and introduction of new instruments and hedging mechanisms. While stabilisation of the process and quicker resolutions under the Insolvency and Bankruptcy Code would increase investor confidence, any measure to improve market liquidity will provide a significant leg up,” said Ashu Suyash, CEO, Crisil.


The rating agency expects corporate bond market’s footprint to increase to 20% of GDP over the next five fiscals from 16% now.