Corporate Bond Market in India - Indian Economy UPSC Notes
A corporate bond is like a loan taken by a company from the public or investors.
When a company needs money for a long time it issues bonds.
Corporate Bond Market in India What is a Corporate Bond Market? A corporate bond is like a loan taken by a company from the public or investors. When a company needs money for a long time (like 5-10 years) to build factories, infrastructure, or expand business, it issues bonds . People who buy these bonds are like lenders, and the company promises to return the money with interest after some time. Example:
Imagine a company like Tata Motors needs ₹1000 crores to build a new car factory. Instead of taking a bank loan, Tata Motors issues bonds to the public. People invest money in these bonds, and Tata Motors promises to repay after 10 years with 8% annual interest. Importance of Corporate Bond Market in India A strong bond market helps companies get long-term money easily. It reduces the pressure on banks, which cannot always provide huge loans. It is less risky compared to the stock market because bonds give fixed returns. Helps India to raise funds for big infrastructure projects like highways…