The bond market is currently offering attractive investment opportunities with yields ranging from 8.70% to 11.15% across various corporate and state-backed issuers, all accessible with a minimum investment of ₹10,000. These options provide investors with diverse risk-return profiles spanning different credit ratings and maturity periods.

Corporate Bond Offerings

Corporate bonds are leading the yield spectrum with the most attractive returns. The following table highlights the key corporate bond options currently available:

Indel Money Limited stands out with the highest yield to maturity at 11.15%, despite carrying an A- rating from Infomerics. The bond offers a 9.75% coupon rate with maturity scheduled for October 2027. Navi Finserv Limited provides a competitive alternative with an 11.00% yield to maturity and a higher 10.60% coupon rate, backed by an A rating from India Ratings.

Adani Enterprises offers a more conservative option within the corporate segment, featuring an AA- rating from ICRA. While the yield to maturity is lower at 8.70%, the bond provides a longer maturity period extending to May 2029 and carries superior credit quality.

State-Backed Bond Options

State-guaranteed bonds present lower-risk alternatives with moderate yields, backed by government guarantees for enhanced security. These options appeal to conservative investors seeking stable returns:

Kerala Infrastructure Investment Fund Board leads the state-backed segment with a 9.30% yield to maturity and 9.67% coupon rate. The bond extends to August 2030, providing the longest maturity among state-backed options. Andhra Pradesh Investment Fund Board offers a 9.00% yield with maturity in November 2028, while Telangana State Industrial Infrastructure Corporation provides an 8.90% yield extending to December 2029.

Investment Considerations

The current bond market landscape presents a clear risk-return trade-off between corporate and state-backed securities. Corporate bonds offer higher yields ranging from 8.70% to 11.15% but carry varying credit risks reflected in their ratings. State-backed bonds provide yields between 8.90% and 9.30% with government guarantee backing, appealing to risk-averse investors seeking stable income streams with enhanced security features.

The US corporate bond market is set for substantial expansion in 2026, with artificial intelligence investments driving unprecedented borrowing activity among major technology companies. Barclays analysts project total US corporate bond issuance will reach $2.46 trillion in 2026, marking a significant increase from current levels as companies accelerate their AI infrastructure investments.

Market Growth Projections

The projected growth represents a notable acceleration in corporate borrowing activity. Net issuance is expected to grow at an even faster pace, with analysts forecasting over 30% year-on-year growth to around $945.00 billion. This expansion is attributed to multiple factors including refinancing requirements, a revival in mergers and acquisitions, and elevated capital spending tied to AI investments.

AI Hyperscalers Lead Borrowing Surge

The five major AI hyperscalers—Amazon, Alphabet's Google, Meta Platforms, Microsoft, and Oracle—have emerged as dominant forces in the corporate bond market. These companies issued approximately $121.00 billion in US corporate bonds last year, substantially exceeding their historical borrowing patterns. This figure represents a dramatic increase from their average annual issuance of roughly $28.00 billion between 2020 and 2024.

Bank of America Securities expects this borrowing trend to accelerate further, with average annual issuance estimated at around $140.00 billion over the next three years. The potential exists for annual borrowing to exceed $300.00 billion, which would position these AI hyperscalers among the largest issuers in the US investment-grade bond market, potentially matching or surpassing major US banks.

Recent Major Bond Transactions

Recent market activity demonstrates the scale of AI-related borrowing, with hyperscalers dominating large bond deals. These companies accounted for four of the five largest US high-grade bond deals in 2025, with most transactions completed in the second half of the year.

Market Impact and Investor Response

The surge in bond supply has created notable market effects, contributing to wider credit spreads and prompting some investors to seek protection through credit default swaps. The cost of insuring hyperscaler debt has risen since mid-2025, with Oracle experiencing the sharpest increase as concerns grow over the scale and pace of AI-related borrowing.

Legal and Regulatory Developments

Legal risks have emerged alongside the borrowing boom, highlighting potential challenges in the rapidly expanding market. Bondholders filed a lawsuit against Oracle this week, alleging losses tied to inadequate disclosure around the company's need to raise additional debt to finance its AI infrastructure expansion. This development underscores the importance of transparency in corporate communications regarding AI investment strategies and funding requirements.