Losing sheen: Domestic corporate bonds no more FPIs' favourites in FY21

Experts say there could be further outflows from the bond market if US bond yields head towards the 2-per-cent mark.

Not so long ago, overseas investors used to lap up all available limits in the domestic corporate bonds. While the government has more than doubled the legroom for investment, foreign portfolio investors (FPIs) have looked the other way.
 
In March 2018, the total investment limit for FPIs in corporate bonds stood at Rs 2.44 trillion, of which they had utilised Rs 2.2 trillion (about 92 per cent). In March, the limit rose to Rs 5.41 trillion, of which only Rs 1.32 trillion, less than a four, was utilised.
 
“There has been a sustained decline in the FPI utilisation