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The two broad segments of debt market in India are - Government Securities Market and Corporate Debt Market. The latter is further classified as Market for PSU Bonds and Private Sector Bonds.

Over the years, there have been new products introduced by the RBI like zero coupon bonds, floating rate bonds, inflation indexed bonds, etc in the Government securities market. The trading platforms for government securities are the "Negotiated Dealing System" and the Wholesale Debt Market (WDM) segment of National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The listed PSU bonds are traded on the Wholesale Debt Market of NSE.

The private corporate bond market segment, raising debt through public issuance in capital market, is only an insignificant part of the Indian Debt Market. A large part of the issuance in the non-Government debt market is currently on private placement basis. Unofficial estimates indicate that about 90 per cent of the private corporate sector debt has been raised through private placement in the recent past. The amount raised through private placement has been continuously rising for the past five years (1999 - 2004), which increased by more than 300 per cent over the five-year period. The growth rate in the public issue processes is only about 80 per cent over the period.

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* Contributed by: -
Jayanta Das & Kartavya Soni,
ICFAI Business School, Hyderabad.