A survey highlights India’s debt market issues

• Equity market growth post-pandemic, but debt market undercapitalization.

• Corporate bond issuances increased to 7.3 lakh crore rupees from April to December 2024.

• Corporate bond market size is 18% of GDP, compared to 80% in Korea and 36% in China.

• Majority funds gathered by firms through private placements, deterring retail investors.

• Borrowing in bond market mainly done by borrowers with high credit ratings.

• Challenges include entry costs, information asymmetry, and absence of a secondary market.