Among other announcements towards deepening India’s corporate bond market, was the one to consider A-rated bonds as investment-grade securities. The finance minister in his Budget speech said that corporate bonds rated BBB or equivalent are investment grade. This has relevance for all kinds of investment funds like pension funds, insurance funds and mutual funds; which invest in corporate bonds across different schemes. Now, more issuances are likely to happen in the capital market space. Institutional investors coming into the lower-rated corporate bonds can aid the much-needed liquidity in this space and help in better price discovery.

Source: Mint February 04, 2018 19:18 UTC