Corporate bond market now a national financing necessity, not a ‘nice-to-have’: NSE CEO Ashish Chauhan

India’s next phase of economic expansion will hinge not just on its booming equity markets but on how quickly it can build depth and liquidity in its corporate bond ecosystem, National Stock Exchange (NSE) Managing Director and CEO Ashish Chauhan said on Tuesday.

Speaking at the inaugural Pan-India Outreach Programme for Corporate Bonds, Chauhan argued that India can no longer afford to treat debt markets as secondary to equities, warning that the country’s financing needs are growing faster than existing structures can support.

“For years, we have all been discussing the need to deepen the corporate bond market--but now the time for action is more pronounced because India's growth ambitions and financing needs will not wait,” Chauhan said, as quoted by ANI.

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He drew a clear line between the roles played by banks and bond markets, stressing that while banks remain critical for short-term credit, they cannot shoulder the burden of long-duration national investments.

“Banks are good for working capital and shorter-tenor credit. Bonds are essential for long-duration nation-building: infrastructure, housing, energy transition, and manufacturing,” he said. According to Chauhan, the urgency to scale up bond markets has moved beyond policy debate and into the realm of necessity. “This initiative matters today, because deepening bonds is not a 'nice-to-have' anymore, it is a national financing necessity,” he said.

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Pointing to India’s success story in equities, Chauhan said the country has already demonstrated its ability to build world-class financial markets. “India's equity markets are globally respected, with market capitalisation crossing $5 trillion in about three decades since NSE began operations,” he noted, adding that the same momentum must now be replicated in the debt segment.

Data shared by Chauhan showed that debt has quietly become the dominant channel for capital raising, albeit through limited avenues. “Since FY22, NSE has enabled fund mobilisation of about Rs 76 lakh crore, of which about Rs 60 lakh crore has been raised through the debt platform,” he said.

However, he flagged a structural imbalance, highlighting the minuscule share of public issuances. “In 2025, public NCD issuances accounted for barely 0.15 per cent of total debt raised,” Chauhan said, outlining the road ahead: “The destination is clear: more listed public issuances, repeat issuers, and active secondary trading, so price discovery becomes continuous, not episodic.”

Despite recent traction, India’s corporate bond market remains small relative to the size of the economy. “India's corporate bond market stands at only about 15-16 per cent of GDP, well below global benchmarks,” Chauhan said, while underscoring the growth potential ahead. “NITI Aayog projects this market can grow to Rs100-120 lakh crore by 2030.”

Reiterating NSE’s role in enabling this transition, Chauhan said the exchange is investing in end-to-end infrastructure to support issuers and investors alike. “At NSE, we are committed to supporting you through the lifecycle, efficient primary issuance through our Electronic Bidding Platform, stronger secondary-market access through our RFQ ecosystem, and sustained issuer engagement,” he said.

He assured corporates that the exchange would remain a long-term partner in their fundraising journey. “If you are prepared to meet the standards of transparency and governance that build trust, NSE will be a steady partner in helping you diversify funding sources, broaden your investor base, extend maturities, and raise long-duration capital at scale,” Chauhan said.

Wrapping up his address, Chauhan offered a philosophical contrast between equity and debt financing. “Equity finances aspirations, but debt finances commitment. Equity can forgive volatility, but debt does not forgive complacency,” he said, adding that when household savings are channelled through credible bond markets, “capital does more than earn returns, it builds the nation.”

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SEBI sharpens focus on bond market reforms

In a related development, the Securities and Exchange Board of India (SEBI) said it is stepping up efforts to strengthen the corporate bond market as a key engine for capital formation and investor diversification.

SEBI Chairman Tuhin Kanta Pandey, speaking to reporters on the sidelines of the same outreach programme, said the regulator is pursuing a multi-layered approach aimed at boosting public bond issuances, improving secondary market liquidity and expanding investor awareness.

“The first thing is how to improve primary issuances, public issuances in bond. The second is how to improve secondary liquidity. And third is how to do more outreach so that the people understand,” Pandey said.

He noted that the market has already expanded significantly, with outstanding corporate bonds rising to Rs 58 lakh crore from Rs 17 lakh crore earlier, clocking a compound annual growth rate of about 12 per cent. Pandey also pointed to a shift in corporate financing behaviour, saying bonds now account for a larger share of industrial credit than banks.

Turning to other segments of the market, Pandey clarified that no immediate regulatory changes are being considered for derivatives. “I have said before that we, when we as a regulator, we are looking at derivative markets in a very methodical manner and based on data and others and at this moment we are not contemplating any measures,” he said. He added that SEBI is maintaining the current framework while continuing to monitor developments through a data-driven lens.