The Reserve Bank of India's October Bulletin has highlighted that there is a decline in default rates in the infrastructure sector and has boosted confidence of investors. This has led to a strong demand for infrastructure bond issuances by banks.
The bulletin released on October 21 also showcases Non-banking financial companies (NBFCs) are also focusing towards raising finance through bond issuances, going forward.
Furthermore, the monthly State of the Economy article includes Deputy Governor Michael Patra as one of the co-authors and one of the three RBI representatives on the Monetary Policy Committee (MPC). The Reserve Bank of India has also stated that the view has further notified that the article does not reflect the central bank's official stance.
To take the data into consideration, corporate bond issuances stood at Rs 79,856 crore during August 2024, wherein ,it was Rs 49,329 crore a year ago. However, corporate bond issuances were marginally lower at INR 3.3 lakh crore than Rs 3.4 lakh crore during the same period of the previous year.
Additionally, corporate bond yields moderated at par with the softening G-sec yields. Also to note, risk premia generally remained unchanged (except for 1-year AAA category) from September 16th to October 15th, 2024
