The Indian unit of South Korea’s Mirae Asset Investment Managers (managing ~245 billion rupees / $2.57B in debt) is prioritizing local short-term corporate bonds, drawn by an attractive yield premium over government securities.
📊 Key Market Metrics & Yield Dynamics
Widening Yield Spread: Benchmark AAA-rated 3-to-5 year corporate bonds yield ~7.45%, providing a ~100 bps spread over government bonds (up from 85 bps a month earlier).
Curve Positioning: Recommends the 3-to-5 year segment for yield pickup, paired with short-dated corporate debt (up to 1 year) as a tactical base for longer-duration positioning.
10-Year Benchmark Target: Projects India’s 10-year sovereign bond yield to fluctuate in the 6.80%–6.95% range over the medium term (vs. 6.83% market level).
💡 Supply & Macro Tailwinds
Supply Relief via Concessional FX Swaps: Expects domestic corporate bond issuance to decline as firms shift toward External Commercial Borrowings (ECBs) using India’s discounted forex swap facility.
Foreign Capital Demand: Foreign banks leveraging FX deposit inflows are positioned to act as key buyers of onshore corporate debt.
Monetary Policy Outlook: Expects the Reserve Bank of India (RBI) to maintain benchmark interest rates through 2026.
💡 The Strategic Takeaway
Mirae Asset’s tactical overweight in 3-to-5 year corporate debt captures an expanding yield spread ahead of supply tightening. As corporate borrowing shifts offshore via FX swaps, corporate bonds offer superior risk-adjusted accrual returns over sovereign debt.