Business Standard

Indian companies are turning more to junk bonds to meet funding needs

Companies using such securities raised more capital in 2022-23 than at any point in the last 8 years

Bond market uncertain about govt's borrowing plans in next fiscal

Sachin P Mampatta Mumbai

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Legendary financier J P Morgan used high-yield debt to help consolidate the US steel industry in 1901. The tycoon facilitated finance for building the Panama Canal, helped form General Electric (GE) and arranged capital for the US treasury when it was running out of money in 1895. He is credited as one of the first to understand the potential for corporate use of high-interest debt.

Corporate bonds rated below the lowest investment grade ‘BBB’ are called junk bonds. They allow companies to raise capital, even for risky ventures, though investors demand high interest rates as compensation given the higher chance

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First Published: Apr 21 2023 | 1:01 PM IST

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