• Capital diversification drivers: NBFCs are shifting toward corporate bond markets to diversify funding sources, improve asset-liability management with longer tenures, and achieve faster interest rate transmission compared to bank financing.
• REIT market expansion: Assets under management across REITs and InvITs have surpassed 10 lakh crore rupees over the last 8 to 9 years, generating average returns above 15% across six years while migrating SPV-level bank debt into bond issuances.
• Retail participation growth: Retail participation in bond issuances increased from 2% to 5% in H1 FY26, aided by SEBI lowering minimum ticket sizes from 1 lakh to 10,000 rupees, though broader adoption requires simplified products and stronger financial literacy across tier 3 and tier 4 markets.
• Secondary market constraints: Despite reaching a market size of 59 trillion rupees with annual issuances around 13.7 to 14 trillion rupees, deepening the corporate bond market remains hindered by limited secondary-market liquidity and heavy concentration in AA- and AAA-rated papers.