Indian firms are turning to bank financing as corporate bond yields climb. Bank lending rates have held steady, making loans more appealing. Growth in wholesale lending at major banks highlights the change.
Indian companies are increasingly choosing bank loans over corporate bonds. This shift occurs as corporate bond yields have surged while bank lending rates remain steady. Market expectations of future policy rate hikes are also influencing this decision.
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Corporate borrowers in India are increasingly opting for bank loans instead of bond issuances. Rising capital market yields have eroded the cost advantage of bonds. Spreads between bank lending rates and bond yields have compressed significantly, especially for higher-rated entities.
Overseas investors have invested a record ₹39,640 crore in Indian government bonds during June so far. The inflows follow tax exemptions and expanded access to sovereign debt. These steps are intended to increase foreign participation in the market.
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Foreign portfolio investors have injected nearly ₹10,000 crore into Indian bonds over four trading sessions. The inflows reversed recent outflows from the debt market.
Indian banks achieved a record consolidated net profit exceeding ₹4 lakh crore in FY26. Top lenders including State Bank of India, HDFC Bank, and ICICI Bank contributed more than half of the total.
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State Bank of India plans to maintain net interest margins above 3 percent in the coming fiscal year through deposit repricing and faster growth in retail and MSME loans.
Several brokerages have identified 10 largecap stocks in India with significant upside potential despite rising oil prices from the US-Iran war. Crude oil has surpassed $125 per barrel, fueling inflation fears and market uncertainty. Stocks like HDFC Bank and Bharti Airtel top the lists from firms including Jefferies and Axis Direct.
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India is set to reapply for inclusion in major global bond indices after introducing tax exemptions for foreign investors. The country has also expanded its pool of long-dated securities to strengthen its appeal.