Mumbai, April 22 -- The financial year ended on March was expected to be another record-breaking year for India's corporate bond fundraising. However, the debt market lost momentum following a sharp rise in yields, and a shift in supply and demand dynamics.

Funds raised through private placement of listed corporate bonds fell 9% year-on-year to Rs.8.99 trillion in FY26, according to data by the Securities Exchange Board of India (Sebi). In all, 1,924 issuers tapped the market last year. In FY25, 1,659 firms had borrowed Rs.9.87 trillion through corporate bond sales.

A sharp rise in government bond yields eroded the cost advantage corporate bonds had enjoyed over bank loans in FY25 and early FY26, nudging borrowers toward cheaper bank fu...