The bond markets in India have grown to a fairly big size during the last few years. A major thrust to the bond markets has taken place during the last decade, more specifically during the last four years. While no money had been raised through the public debt issues in 94-95, an amount of Rs. 2,940 crore was mobilised in 95-96 which grew to a high of Rs. 6977 crores in 96-97. The share of the debt in the total amount offered to public increased from 25% to 60% over this period. During the year 1997-98, 63% of the total fund mobilisation was from debt issues only, clearly signifying a shift from equity to bond markets.
Along with the volume growth of the bond markets, there has been qualitative changes too during this period. Private placements of bonds has become an important area of bond markets now. For example, during the last two years even the public issues of debts have been outshined by the Private placement of Bonds. During 1997-98, there were as many as 251 private placement a massive amount of Rs. 30, 944 crores, of which the largest size of the issue was from IDBI mobilising 1200 crores. A phenomenon to be noticed is that the regular return bonds with fixed return are the most preferred bond amongst investors. Of the 351 instruments put on market during the period, 156 instruments offered regular return.