If the Budget follows through with the necessary policy changes, there could be interesting changes in the bond market. The Finance Minister said that he would ask the Securities and Exchange Board of India (Sebi) and the Reserve Bank of India (RBI) to mandate corporates to raise about one-fourth of their financing needs from the bond market. He also said that it would be useful to classify ‘BBB-rated’ corporate bonds as investment-grade and thus allow pension funds and insurance companies to enter that space.
This means, in addition to the choices of tapping the equity market, making rights issues to existing
