INR corporate bonds are an attractive alternative to IGBs

The Indian LCY corporate bond market is one of the largest in Asia, after China's and Korea's (Figure 3). It is also arguably deeper and more liquid than all other LCY corporate bond markets in South/Southeast Asia. It has grown at a CAGR of more than 15% in the past five years, and we estimate its current size at c.USD 280bn or c.44% of the IGB market. It is dominated by large quasi-sovereigns and other highly rated local issuers. 


Market size, high credit ratings and good liquidity make corporate bonds, particularly those issued by strong and strategic quasi-sovereign issuers, an attractive alternative to investors looking at IGBs, observed Standard Chartered.