India’s debt market task ahead is to enable funds for mid-sized corporates, municipalities, says CEA Nageswaran

India’s debt market task ahead is to enable funds for mid-sized corporates, municipalities, says CEA Nageswaran

India's Chief Economic Advisor, V Anantha Nageswaran on November 28 said that the task ahead for the bond market is to enable funds to the mid-sized corporates, infrastructure SPVs, supply chain firms and municipalities.

These companies needs to get access to markets systematically and affordably, he added.

Historically, large corporates firms raise funds with ease, but the lower rated or mid-sized corporates face difficulties to raise funds amid less Investor base for these entities and higher rate in the bond market.

"Large and highly rated firms raise capital with ease. The task ahead is to enable mid-sized corporates, infrastructure SPVs, supply chain firms and municipalities to access markets systematically and affordably," Nageswaran said during the address at 5th edition of Trust Group's India Debt Capital Market Summit 2025 in Mumbai.

He added that a world-class debt market requires credible domestic credit curve across ratings, larger free flow of government securities for better benchmark pricing, additive market making to ensure liquidity even during stress, greater participation from pensions, provident funds and insurers, diverse instruments, securitisation, credit enhanced bonds, municipal bonds, green and transition bonds, hybrid capital.

Our regulators have laid important foundations, corporate bond market infrastructure, electronic platforms, rationalized stamp duties, support for securitisation, invents, reads and retail access frameworks. The next phase of regulation now will move on to smarter rules and not necessarily more rules, he added.

India will not build a deep debt market through regulation alone. Issuers, investors, arrangers, credit advances and rating agencies must act as market builders, Nageswaran said.