Best Corporate Bonds in India

What is a Corporate Bond?

Companies use corporate bonds as fixed-income securities to obtain funding for their business needs including expansion initiatives and debt restructuring and operational funding. The bond purchase from companies enables investors to provide funding to the issuing company which promises to deliver interest payments and return the investment amount at the end of the bond term. The debt market depends on corporate bonds as a fundamental component which rating agencies including CRISIL and CARE and ICRA evaluate for creditworthiness. Investors can achieve better returns through market investments because they must take on additional risks when buying bonds that mature after 2025.​

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The Indian corporate bond market has developed into a larger and more complex financial sector. The corporate bond market expanded to ₹53.6 lakh crore (approximately $626 billion) during 2025 while showing continuous growth from the previous ten years. The market has become more accessible through digital platforms while regulatory changes have simplified bond issuance and enhanced credit evaluation methods. The market achieved its highest annual bond issuance of ₹9.9 trillion during FY25 which set a new record because investors showed maximum confidence in the market.​

Top 10 Corporate Bonds in India

The following corporate bonds in India offer attractive yields and enjoy strong ratings:

• Poonawalla Fincorp Limited
• Indel Money Limited
• Satya Microcapital Ltd
• RDC Concrete India Pvt Ltd
• Aye Finance Pvt Ltd
• Spandana Sphoorty Financial
• Criss Financial Limited
• Kerala Infrastructure Investment Fund Board
• Telangana State Industrial Infrastructure Corporation
• Sammaan Capital Limited

These bonds are favored for their relatively high yields, secured structures, and credit ratings that signify moderate to low risk.​

Overview of Corporate Bonds

Poonawalla Fincorp Limited – 10.25% NCD, March 2027, AAA

This is a secured non-convertible debenture (NCD) issued by Poonawalla Fincorp Limited, an NBFC focused on retail and MSME lending. The bond carries a fixed coupon of 10.25% with maturity on 03 March 2027 under ISIN INE511C08AG6, and is rated AAA (highest safety) by leading agencies, indicating extremely low default probability.​

For investors, this NCD is typically positioned as a relatively safer high-yield option versus bank FDs or government bonds, though there is still issuer and interest-rate risk since it is a corporate paper.​

Indel Money Limited – up to ~12–13.7% Coupon, 2028, BBB+

Indel Money Limited is a gold-loan and retail-lending NBFC that raises money through secured listed NCDs. A representative bond is the 12% secured NCD (ISIN INE0BUS07BX5) maturing on 23 July 2028, rated BBB+ (Stable) by CRISIL, with monthly interest pay-outs and YTM in the 12–12.7% range.​

The “up to 13.7%” yield figure usually reflects higher-coupon or long-tenor series within its public issue structure, but the key point is: high coupon comes with moderate credit risk, as BBB+ is an investment-grade but lower-tier rating, suitable only for investors with higher risk appetite.​

Satya Microcapital Ltd – 10.4% NCD, around 2027, BBB+

Satya MicroCapital Limited is an NBFC-MFI lending primarily to women micro-entrepreneurs across rural and semi-urban India. One of its recent NCDs is a 10.4% unsecured listed NCD (ISIN INE982X08117), rated BBB+ (Stable) by ICRA, with maturity in February 2026 and senior unsecured status.​

For the 2027-maturity bonds, the economics are similar: mid-teen growth microfinance franchise, higher yield versus mainstream NBFCs, but exposed to microfinance sector stresses, collection risk, and lower rating band, so these are meant for investors who understand MFI risk and can tolerate volatility.​

RDC Concrete India Pvt Ltd – 11.25% NCD, 2028, A–

RDC Concrete India is one of the leading ready-mix concrete players, issuing listed NCDs to fund expansion and working capital. The cited bond offers around 11.25% coupon with maturity in 2028 and a rating in the A– category, which signals adequate safety but higher risk than AA/AAA names.​

This type of bond suits investors comfortable taking sector-specific (construction/cyclical) risk in exchange for a double-digit coupon, and it should be treated as a credit-risk position, not a quasi-FD.​

Aye Finance Pvt Ltd – 2027, AA– Range, Attractive Yields

Aye Finance is an MSME-focused lender providing working-capital loans to small businesses across India. Its NCDs typically come with “attractive yields” in high single-digit to low double-digit range and ratings around AA–, indicating a relatively strong credit profile among smaller NBFCs.​

Bonds maturing in 2027 combine better safety than BBB names with still-elevated coupons versus top-tier AAA issuers, making them a middle-path option for investors ready to take some credit risk but not comfortable going too far down the rating curve.​

Spandana Sphoorty Financial – up to ~12.55% Coupon, 2027, A

Spandana Sphoorty Financial is a large listed microfinance NBFC, and its recent NCD issues have offered yields up to around 12.5% for longer-tenor or lower-seniority tranches. With an A category rating, the bonds indicate adequate safety but are clearly riskier than AA/AAA corporate bonds.​

These papers are meant for investors seeking high income and who understand MFI-specific risks like regulatory changes, rural income shocks, and higher credit-cost volatility.​

Criss Financial Limited – up to ~12.40% Coupon, 2026, A–

Criss Financial is a smaller NBFC issuing listed NCDs with coupons up to about 12.4% for 2026-maturity series. With a typical A– rating, it falls into the “moderate safety” bucket: better than BBB names but carrying noticeable credit risk relative to top-tier issuers.​

Given the short to medium tenor, these bonds are usually used by income-seeking investors comfortable with NBFC credit risk and who want to lock in high rates for a few years rather than very long durations.​

Kerala Infrastructure Investment Fund Board (KIIFB) – ~9.5% Coupon, 2031–2035, AA

KIIFB bonds are quasi-sovereign infrastructure bonds backed by the Kerala state government entity Kerala Infrastructure Investment Fund Board. These long-dated bonds (maturities in 2031–2035) typically offer coupons around 9–9.5% with AA-category ratings, reflecting strong but not sovereign-level safety.​

They appeal to long-term, relatively conservative investors who want higher yields than G-Secs but still prefer a public-sector-linked borrower to private NBFCs, and are comfortable with long duration and associated interest-rate risk.​

Telangana State Industrial Infrastructure Corporation (TSIIC) – ~8.9% Coupon, 2033, AA

TSIIC bonds are issued by Telangana State Industrial Infrastructure Corporation, another state-linked entity funding industrial and infrastructure projects. The cited series offers a coupon around 8.9% with a 2033 maturity and AA-type rating, positioning it as a relatively safe, quasi-government bond with moderate premium over G-Secs.​

These suit investors who can lock money for a decade, are comfortable with state-level credit exposure, and want stable, predictable cash flows with lower default probability than many private issuers.​

Sammaan Capital Limited – ~9.6% Coupon, 2035, AA

Sammaan Capital Limited is a financial entity issuing long-term bonds with coupons around 9.5–9.6% and maturities running up to 2035, generally with AA-range ratings. The credit profile is seen as relatively strong, and the long tenor allows investors to lock in high yields for a decade or more, but with higher duration risk.​

Such bonds are useful for investors building a long-horizon fixed-income ladder, especially those who want a blend of yield and safety above PSU/sovereign levels, but who can tolerate mark-to-market volatility if interest rates move up.​

Benefits of Corporate Bonds

• Higher returns than government securities.
• Regular income through coupon payments.
• Diversification across sectors reduces risk.
• Lower volatility than equities.
• Some bonds offer tax advantages.

Disadvantages of Corporate Bonds

• Default risk is the biggest concern.
• Bond values fall when interest rates rise.
• Some bonds lack liquidity in secondary markets.
• Interest income is fully taxable.

Taxation on Corporate Bonds

Interest Income

• Taxed as per slab (5%–30%).
• TDS 10% if interest exceeds ₹5,000 (avoidable via Form 15G/15H).

Capital Gains

• LTCG on listed bonds (>12 months): 12.5% without indexation.
• STCG: taxed as per slab.
• Unlisted bonds LTCG (>36 months): 20% with indexation.
• No tax on principal repayment at maturity.

Who Should Invest in Corporate Bonds?

• Moderate to conservative investors seeking stability.
• Investors wanting to diversify equity-heavy portfolios.
• Those looking to expand fixed-income exposure.