An appeal to consider A rated bonds for investments was among Budget proposals made on Thursday to deepen India’s corporate bond market.
Finance minister Arun Jaitley in his Budget speech said that corporate bonds rated ‘BBB’ or equivalent are investment grade. However, he recognized that in India, most regulators permit only bonds with ‘AA’ rating as eligible for investment.
He then urged concerned regulators to consider moving from ‘AA’ to ‘A’ grade ratings. This has relevance for all kinds of investment funds like pension funds, insurance funds and mutual funds which invest in corporate bonds across different schemes, according to experts.
