India gets 239 bids worth 310.70 bln for 2055 bond

India gets 239 bids worth 310.70 bln for 2055 bond

India’s Sovereign and Corporate Bonds Attract Strong Investor Demand Amid Liquidity Abundance

India’s bond market saw robust investor participation in recent auctions, with the government’s 2055 bond drawing 239 bids worth ₹310.70 billion ($3.81 billion), reflecting heightened confidence in the country’s debt instruments. This surge aligns with broader trends of elevated liquidity and aggressive central bank interventions, which have bolstered demand for both sovereign and corporate bonds.

The Reserve Bank of India (RBI) has injected significant liquidity into the system, with an average surplus of ₹2.4 trillion in February 2026, up from ₹660 billion in January. This, coupled with a cumulative 125-basis-point rate cut since early 2025, has driven down borrowing costs. For instance, India’s first sovereign green bonds, issued in February 2026, were priced at yields 5–6 basis points below comparable government bonds, underscoring strong appetite for environmentally focused debt.

Corporate bond markets have similarly thrived, with firms planning to raise at least ₹300 billion in August 2025 alone, driven by declining yields and cheaper capital. High-rated issuers, including State Bank of India and Power Grid Corp, have capitalized on favorable conditions, while mutual funds and foreign investors have increased allocations to debt securities. Notably, foreign funds purchased ₹55.5 billion of India’s sovereign bonds in a single week, a 46-fold jump from the prior week, fueled by RBI’s rupee-supporting measures.

Despite record borrowing plans, investor sentiment remains resilient. Traders highlight an “accrual strategy” (buying bonds to hold until maturity) as attractive amid stable yields and ample liquidity. However, concerns persist about supply-demand imbalances, particularly as states plan large debt sales, such as the ₹486.15 billion auction in February 2026.

Overall, India’s bond market continues to gain traction as a key destination for global and domestic capital, supported by policy easing and structural reforms.