In a dramatic shift, the Reserve Bank of India reported that private sector companies have vastly increased their investments in bonds and debentures for fiscal year 2025. The central bank analyzed 15,919 non-government, non-financial firms, which collectively invested Rs 35,981 crore, a stark rise from the Rs 224 crore recorded in the previous year.
This surge correlates with increased corporate bond issuances, rising to Rs 9.87 lakh crore from Rs 8.38 lakh crore year-on-year. Additionally, the foreign investment in Indian government securities surged following JP Morgan’s inclusion announcement, with further boosts from Bloomberg Bond Index, elevating bond prices and making them more attractive to investors.
Amidst this bond market upturn, RBI data indicated a notable decline in equity and mutual fund investments by these companies, dropping by 62.25% and nearly halving respectively. Despite shifts in investment avenues, companies maintained robust profits, with net profit margins and returns on equity improving, primarily driven by the thriving services sector.
(With inputs from agencies.)
Leave a comment