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Developing High-Yield Bond Market in India

Though high-yield bond market is almost non-existent in India. But present macroeconomic factors indicate the possibility and need of this bond-market segment. The reasons for its development are listed below:

India's burgeoning growth of the SME sector, a key engine of economic growth. This sector needs timely and easy financing to maintain its growth, but most of them find it difficult to meet the lending criteria of Banks. This is the early sign of the beginning of high-yield bond market, as was the situation in US in early eighties and European countries in the late nineties.

Industrial Production has been steadily increasing over the last ten years as shown in the table below.

Source: SEBI: Handbook of Statistics

Table 2: Index Numbers of Industrial Production

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