“The market levels are absolutely fantastic, absolute yields are quite low at multi-year lows, spreads are quite tight,” said Neeraj Gambhir, group executive and head - treasury, markets and wholesale banking products at Axis Bank.
Individual investors in India are rushing to buy corporate bonds from weaker borrowers, taking bigger risks to boost returns in a debt market dominated by institutional investors.
Company note sales to retail investors have more than doubled from a year earlier to 67.2 billion rupees ($898 million) so far in 2021. A further 31 billion rupees of bonds that individuals can buy into are being marketed right now, and another 50 billion rupees of such debt is in the pipeline including a deal from India Grid Trust announced late last week. Many savers desperate for yield are likely to jump at the chance to buy such notes. That’s because they are struggling with persistent inflation pressure even as bank deposit rates have dropped to the lowest in more than a decade.