Team Blitz India
NEW DELHI: After clocking a compound annual growth rate (CAGR) of 9 per cent over the past five fiscal years, the Indian corporate bond market appears set for faster growth. Rating agency Crisil expects outstanding size of bond market to more than double to Rs 100-120 trillion by fiscal 2023 from Rs 43 trillion as of last fiscal.
The large capital expenditure (capex) in the infrastructure and corporate sectors, growing attractiveness of the infrastructure sector for bond investors.
“Strong retail credit growth are expected to boost bond supply, rising financialisation of household savings should drive demand. Regulatory interventions are helpful, too,” said Somasekhar Vemuri, Senior Director, Crisil Rating.
Capex in the infrastructure and corporate sectors is expected to be driven by decadal-high capacity utilisation, healthy corporate balance sheets and a strong economic outlook. Crisil foresees capex of Rs 110 trillion in these sectors between fiscals 2023 and 2027, 1.7 times than that in the past five fiscal years. Crisil expects this pace of capex to continue past fiscal 2027.
