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NSE CEO: Debt Market Crucial for Nation's Growth
4 Feb
Summary
- India's corporate bond market needs deepening for growth ambitions.
- Bonds are essential for long-duration nation-building projects.
- The market is shallow at 15-16% of GDP, with potential to reach Rs 120 lakh crore.
National Stock Exchange (NSE) Managing Director and CEO Ashish Chauhan has underscored the critical necessity of expanding India's corporate bond market to meet the nation's escalating growth and financing demands. He articulated that robust, liquid debt markets are indispensable partners to the country's well-established equity ecosystem, especially for funding long-term national objectives.
Chauhan emphasized that while banks primarily support working capital, bonds are vital for enduring nation-building initiatives, including infrastructure development, housing, and the energy transition. He pointed out that India's equity markets have achieved global recognition, with a market capitalization exceeding USD 5 trillion. The focus, he stated, must now shift to replicating this success in the debt markets.
Despite debt dominating capital raising primarily through private placements, Chauhan highlighted a market imbalance. He noted that public issuances of corporate bonds constituted a small fraction of total debt raised. To foster continuous price discovery, there is a need for increased listed public issuances, repeat issuers, and active secondary trading.
Chauhan acknowledged that India's corporate bond market remains relatively shallow, standing at approximately 15-16% of GDP compared to global benchmarks. However, he cited NITI Aayog projections indicating substantial growth potential, estimating the market could reach Rs 100-120 lakh crore by 2030. NSE affirmed its commitment to facilitating this growth through its Electronic Bidding Platform and RFQ ecosystem, promising to be a steady partner for issuers adhering to transparency and governance standards.
Concluding his address, Chauhan drew a parallel between equity and debt financing, stating that equity finances aspirations while debt finances commitment. He asserted that well-functioning bond markets ensure capital not only generates returns but also contributes to nation-building, emphasizing that debt requires a commitment to avoid complacency.
