Vishal Goenka, the co-founder of IndiaBonds.com, highlights that bonds are gradually gaining popularity among retail investors. “In 2025, bonds started being discussed less as a static yield instrument and more as an active, tradable part of India’s capital markets.” In an interview with Mint, Goenka underscored that increased tariffs, volatility in oil and other commodity prices and any stress in the NBFC sector due to slower economic growth are the key risks for bond markets. Here are edited excerpts of the interview:
How did 2025 reshape the narrative around bonds in India?
2025 helped shift bonds from an ‘institution-only’ product to a more widely used ‘retail-friendly’ portfolio allocation.
That change is visible in secondary market activity: FY25 saw nearly 11.9 lakh corporate bond trades, and by November 2025, trade counts had already crossed nearly 16.2 lakh — a new high.
In effect, bonds started being discussed less as a static yield instrument and more as an active, tradable part of India’s capital markets.
With a 125 bps repo rate cut by the RBI, the short-term bonds enjoyed healthy gains.
How are corporate bonds stepping up as a key financing engine for India’s capex cycle?
India’s capex cycle needs long-tenor capital that matches project cash flows, and corporate bonds are increasingly filling that role alongside banks.
Bonds offer issuers flexibility on tenor and structure, while an expanding domestic investor base improves funding reliability.
As secondary liquidity improves, price discovery and refinancing confidence also strengthen—supporting capex at scale.
In fact, corporate credit has seen steady growth in non-banking funding via capital markets.
How is the RBI’s monetary policy stance impacting the corporate bond market?
The RBI’s stance matters as much through expectations and liquidity as through the repo rate itself.
When the RBI signals a controlled easing bias—or even a dovish pause—it helps prevent disorderly moves at the long end, and that stabilises term funding for issuers.
But the real link is transmission. Rate cuts help only if the long end of the government curve stays contained—because that’s the reference point for corporate pricing and refinancing.
Hence, although the 0-3 years maturity bonds have gained from cuts, longer term rates have remained sticky at higher levels, discouraging corporate funding for longer duration.
How can spiking bond yields in the US and Japan affect emerging markets like India?
Higher US and Japan yields can reprice global risk, trigger volatility, and temporarily tighten financial conditions for emerging markets.
For India, the impact is often most visible through sentiment rather than any direct impact, as we are more of a domestic demand-led bond market.
Do you see the need for any policy changes to build a more active corporate bond trading market?
The data already tells us the market is accelerating, but depth is still uneven, and liquidity remains concentrated. Hence, the next leg of growth through policy has to be engineered.
Some key changes would be: (1) establishing a regulatory uniform distribution code for bonds much like equities and mutual funds, (2) right framework for market making in corporate bonds to enhance liquidity, (3) roll back of TDS on listed bonds as they are operationally challenging and distort XIRR calculations, and (4) tax equalisation or simplification with other asset classes such as equities.
What key risks could weigh on the Indian bond market in 2026?
Interest rates are likely to remain unchanged, with no possibility of another rate cut in 2026. Hence, overall, a very benign environment for fixed income investing.
Key risks in 2026 can include global geopolitical shocks such as more tariff drama, commodity pricing volatility, especially oil and any stress in the NBFC sector due to slower economic growth.
What should retail bond investors keep in mind when evaluating long-term opportunities in India’s corporate bond market?
Treat a bond like what it is: a loan to a company. Don’t chase the headline yield—stick to regulated, listed, rated bonds, read the key covenants, diversify across issuers, and keep high yield as the “spicy” portion—not the whole plate—because liquidity and risk show up when markets get stressed.
A portfolio approach to fixed income is encouraged with a combination of high-yield 2-3 year maturity corporate bonds and long-maturity government or PSU bonds.
Read all bond market-related news here
Read more stories by Nishant Kumar
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.