Corporate bond market in India

Abstract

Capital requirements of entities such as corporations, governments, and individuals are dependent on various internal as well as external sources. For corporations, debt and equity are the two instruments through which funds are raised. Corporate debt mainly consists of funds raised by corporations through debt financing. Corporations may borrow mainly through two ways — bank loans and bonds. Loans are provided by both banks and non-banking financial institutions in any diversified loan market. These loans are processed at a pre-negotiated interest rate and for fixed or variable durations. Thestypes of bank financing offered are short-term finance (overdrafts, working capital funding), mediumterm finance (term loans, asset finance, and leasing), and long-term finance (commercial mortgages, fixed asset loans).