Corporate Bond Market Must Deepen To Support India’s Growth Plans, Says NSE CEO

India needs a stronger and more diversified corporate bond market to finance infrastructure, energy transition, and long-term development projects, National Stock Exchange of India Managing Director and CEO Ashish Kumar Chauhan said at the CareEdge Debt Market Summit 2026.

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Speaking at the summit, Chauhan said India’s financing ecosystem remains largely dependent on banks despite the rapid expansion of the debt market in recent years. He said large-scale economic growth requires long-duration capital that cannot rely only on traditional banking channels.

“The corporate bond market is the economy’s second engine of growth,” Chauhan said at the event. He added that outstanding corporate bonds in India have increased from ₹17.5 lakh crore in FY15 to more than ₹59 lakh crore currently.

According to Chauhan, debt issuances in FY26 mobilised nearly ₹9.1 lakh crore, almost double the amount raised through equity markets during the same period.

Market Participation Remains Narrow

Despite the rise in issuances, Chauhan said the market still faces concentration risks. Around 85%-90% of bond issuances are rated AA or AAA, while nearly 70% of outstanding corporate bonds belong to financial sector issuers.

He said the market needs broader participation from sectors beyond financial services and greater access for smaller businesses seeking long-term funding.

Retail participation in the corporate bond segment also remains limited. Chauhan said household penetration in corporate bonds is below 1%, while awareness levels remain significantly lower compared with equities and mutual funds.

According to him, strengthening investor participation and improving liquidity will be essential for the next phase of market development.

Regulators Exploring New Debt Market Measures

Chauhan said regulators and exchanges are evaluating several initiatives aimed at expanding the corporate debt ecosystem. These include bond exchange-traded funds, derivatives linked to corporate bond indices, and a separate regulatory structure for debt brokers.

He also referred to the proposed pilot project on tokenisation of corporate bonds using distributed ledger technology.

“We must move carefully, though we must remain open to useful innovation,” Chauhan said while discussing tokenisation initiatives at the summit.

The Securities and Exchange Board of India is also exploring operational frameworks around faster settlements and improved transparency in debt markets through digital infrastructure.

Focus On Wider Issuer Base

Chauhan said exchanges and regulators plan to conduct outreach programmes to encourage more companies, including small and medium enterprises, to access listed debt markets for financing.

He noted that a broader issuer base and improved secondary market activity would help strengthen price discovery and deepen investor confidence in the segment.

“Our goal is not merely a bigger bond market. Our goal is also a better bond market,” Chauhan said at the CareEdge Debt Market Summit 2026.