Indian Bond Market News

In this phase, the most compelling strategy is to lean into accrual, layer in selective long-duration government bonds and pick credit judiciously — stay active, stay selective.

As we would likely approach the end of the rate easing cycle by the end of FY2026, we could see incremental reallocation towards corporate bonds from government securities.

Start with who the bond issuer is and its credit rating. Essentially, investors should understand the company that is issuing the bond and whether its business performance provides credibility that it will make its interest and principal payments on time.

The setup for Indian fixed income is unusually favourable: stable growth, subdued inflation, and global policy easing. Investors should capitalise on this by anchoring in carry, layering in select high-yield credit, and retaining a calculated long-duration slice.

India’s corporate bond market (secondary) is moving from fewer, larger tickets to many more, smaller ones—the hallmark of retail participation enabled by OBPP rails.

With interest rate cuts and geopolitical uncertainties, retail investors are increasingly turning to bonds for stability and returns. Experts advocate a dual strategy of short-term high-yield corporate bonds combined with long-term government securities.

Foreign investors ramped up purchases of Indian government bonds by 46 times last week, an indication that aggressive currency intervention by the central bank is building market confidence.

India’s bond market remains well-positioned in an otherwise uncertain global environment, says Vineet Agrawal, Co-founder of Jiraaf. He adds that strong domestic participation and improving market depth have ensured stability in bond investments.

If successful, it would be the biggest bond issue of this year. In November 2024, it had raised ₹11,150 crore through the sale of bonds.

Against a backdrop of a longish pause in the rate cycle, investors may choose to invest in short to medium-duration funds, having higher exposure to corporate papers based on their investment objective and risk appetite, advised Avnish Jain of Canara Robeco AMC.