Stimulus to ease funding burden for India's weakest firms in Covid era

Yield premiums on 10-year rupee bonds ranked BBB have dropped about 80 basis points from an 11-year high in late March

India's  weaker borrowers are facing a record amount of local-currency bonds coming due this quarter, but unprecedented stimulus steps may mean they are better equipped to pay back their debt than in the past.

Local companies ranked below AA+ need to repay a total of 383 billion rupees ($5.1 billion) of notes in the July-September period, the highest ever, according to Bloomberg-compiled data. Fundraising has become much cheaper for the firms though, after cash infusions of about $50 billion by the country’s central bank and a $277 billion rescue package for the economy by the government.

Yield premiums on 10-year