List of Bond Issuers in India: Government, PSU & Corporate Bonds Explained

When you think about saving your money safely and earning a little extra on it, bonds are one of the smartest investment options out there. But here’s a question, who exactly are you lending your money to when you invest in a bond? That’s what this blog is all about.

We’ll break down who issues bonds, why they do it, and how different types of bond issuers, like governments or companies, serve different purposes. Think of it like choosing between lending money to your super-responsible friend or a business-minded cousin, both may pay you back, but the risk and reward will vary. Let's explore how to pick the one that suits your financial comfort zone.

What Are Bonds?

A bond is like a loan that you give to a company or the government. In return, they promise to:

• Pay you regular interest (also called a coupon)—this is like your earning.
• Return your money after a fixed number of years (called maturity).

Who Issues Bonds?

Bonds can be issued by:

1. The Government (called government bonds or sovereign gold bonds)
2. Companies (called corporate bonds)

Each of these bond issuers has its own purpose:

• The government issues bonds to raise money for big projects like building roads, schools, railways, etc.
• Companies issue bonds to grow their business, pay old loans, or start new projects.

Real-Life Example

Let’s say you want to help your school raise funds to build a new playground. The school gives you a paper that says, "Give ₹1,000 today, and we’ll pay you ₹100 every year for 5 years, and return your ₹1,000 after that."

That paper is like a bond.
In real life, companies and governments issue such bonds to people like you.

What Are Bond Issuers?

Bond issuers are entities that issue bonds to finance their financial needs. These can include the government, public sector enterprises, private companies, infrastructure bodies, and specialised financial institutions. Each issuer has its own purpose for raising funds, such as public development, business expansion, or refinancing debt. Understanding who the issuer is helps you evaluate the stability of your investment, the expected cash flow, and the risk level associated with the offering.

Common Bond Issuers in India

Just like different people borrow money for different reasons, various institutions issue bonds to raise funds. Here’s a simple breakdown of who usually offers bonds in India:

Government Bodies

These include the central government and government-backed organisations. They issue bonds to fund infrastructure, public welfare schemes, or long-term development projects. These are considered the safest because they're backed by the government.

Public Sector Banks

These are banks owned and operated partly or wholly by the government. They often issue bonds to meet regulatory needs or fund lending activities. These bonds offer moderate to high safety depending on the bank's health and credit rating.

Private Finance Companies

These are large non-banking financial companies (NBFCs) that raise funds through bonds to expand operations, give out loans, or manage debt. Their bonds may offer higher interest rates but come with varying levels of risk based on the company’s financial health.

Infrastructure and Utility Agencies

These include organisations working in areas like highways, energy, transport, or urban development. Since many of them are linked to government projects, they are often considered relatively stable, with medium-to-long-term bonds.

Central Bank–Linked Institutions

These include bodies that operate under the guidance of the Central Bank, often used to issue government securities like treasury bills or sovereign gold bonds. These bonds are typically very safe and ideal for conservative investors.

There are also government bond issuers like:

• Reserve Bank of India (RBI) for government bonds and sovereign gold bonds
• National Highways Infra Trust
• THDC India Limited

Who Should Consider Investing in These Bonds?

Investors may consider exploring bonds based on their financial goals and risk tolerance. Some possible investor groups include:

• Individuals seeking a predictable cash flow through fixed coupon payouts.
  
• Investors who want regulated fixed-income instruments in their portfolio.
  
• Those who prefer alternatives to traditional savings products.
  
• Investors who wish to diversify by adding corporate bonds from different issuers and sectors.
  
• Individuals who are comfortable evaluating bond ratings and issuer profiles before investing.
  
• Long-term planners who want instruments with defined maturity dates.
  
• Investors who prefer fully digital access to bonds through Bondbazaar.

 

These groups often choose bonds to align their portfolios with stability, income planning, and diversification.

 

Why Do Companies Issue Bonds?

Here’s why corporate bond issuers raise money by giving bonds:

• To expand their business
• To pay old debts
• To launch new products
• To get money without giving up ownership (unlike shares)

Understanding Bond Ratings

Every bond comes with a credit rating, which tells you how safe the bond is. Think of it like marks in school:

Bondbazaar always shows you the credit rating so that you can choose based on your comfort with risk.

Must Read - What Are Bond Credit Ratings?

Types of Bonds You Can Buy

Here are some common types you’ll find in a bond issuers list:

1. Government Bonds

These bonds are issued by the government and are very safe. Best for people who want a stable income with no risk.

2. Sovereign Gold Bonds

These are linked to the price of gold + pay you 2.5% interest yearly. Great for gold lovers who want a fixed income.

3. Corporate Bonds

Corporate bonds are issued by companies. They offer higher interest, but some may have slightly higher risk.

4. High-Yield Bonds

These give very high returns (like 11–14%), but you must check the credit rating carefully. Some may be offered by new or smaller companies.

Benefits of Knowing the Bond Issuers

Knowing the bond issuers list helps you:

• Understand who you’re lending to
• Pick bonds that match your goals (safety or high returns)
• Diversify your investment by choosing bonds from different sectors (banking, finance, power, etc.)

How Bondbazaar Helps You

With Bondbazaar, you get:

• Access to over 10,000 bonds from top issuers
• Ability to buy and sell bonds online
• No account opening or maintenance charges
• Bonds with different ratings, returns, and durations
• Expert support for every investor

Whether you are looking to invest in government bonds or corporate bonds, Bondbazaar makes it easy for you to choose confidently.

Easy-to-Understand Scenario

Let’s say a working professional in their mid-30s wants to start investing in bonds but isn’t sure whom to trust. They visit a bond investment platform to explore options and filter the list based on safety and returns. They choose a bond with a high credit rating and a steady return, offering a good balance of security and income. To diversify, they also pick a gold-linked bond that offers fixed interest and tracks the price of gold, something they personally value. With this mix, their money is now working smartly, growing steadily with less stress and more confidence.

How to Invest in Bonds in India

Investing in bonds is simple with today’s digital platforms. Here’s a quick step-by-step guide:

 

1. Create or log in to your account on a regulated bond marketplace.
2. Browse available options, including government bonds, PSU bonds, and corporate bonds.
3. Review key details, including coupon rate, maturity, issuer profile, and bond ratings.
4. Enter your investment amount and complete your KYC and demat details.
5. Make the payment through UPI, ASBA, or trading account transfer, depending on whether the bond is purchased in the primary or secondary market
6. Once allotted, the bonds will be credited to your demat account, and interest will be paid as scheduled.

Factors to Consider Before Investing in Bonds

Before selecting any bond, it is important to assess a few key factors that help you make informed decisions:

• Credit Rating: Review bond ratings to understand the issuer’s repayment capability.
  
  

• Issuer Profile: Check whether the government, PSU, or private entity issues bonds and for what purpose.
  
  

• Interest Payout: Understand the coupon structure, payout frequency, and maturity timeline.
  
  

• Liquidity: Evaluate whether the bond is listed and easily tradable if you plan to exit early.
  
  

• Tenure: Match the bond’s duration with your financial goals.
  
  

• Tax Implications: Check how interest income and capital gains may be taxed.
  
  

• Diversification: Spread exposure across different issuers and categories of corporate bonds and government bonds.

These factors help align your investment with your financial comfort zone.

What Are the Risks in Corporate Bonds?

Like all financial instruments, corporate bonds come with certain risks. Key considerations include:

• Credit Risk: The issuer’s ability to meet interest and maturity payments may vary based on financial health.
  
  

• Market Risk: Economic changes can affect bond prices and demand.
  
  

• Liquidity Risk: Some corporate bonds may have lower trading volumes, affecting ease of exit.
  
  

• Interest Rate Risk: If interest rates rise, the market value of existing bonds may fall.
  
  

• Inflation Risk: Returns may be impacted if inflation rises faster than coupon income.
  
  

• Limited Upside: Bonds offer fixed interest and may not benefit from higher company growth.

Understanding these helps investors choose bonds with suitable risk levels.

How Do Corporate Bonds Work?

 

Corporate bonds follow a structured process from issuance to maturity. Here’s how they typically function:

1. A company decides to raise funds without diluting ownership and issues bonds to the public.
2. Investors lend money to the company in exchange for fixed coupon payouts.
3. The company pays interest at pre-set intervals such as monthly, quarterly, or annually.
4. At maturity, the company repays the principal amount to investors.
5. The bond’s price may fluctuate in the secondary market based on demand, interest rates, and bond ratings.
6. Investors can choose to hold the bond until maturity or sell it on an exchange, depending on liquidity.

 

This structure offers predictable income and a defined repayment timeline.

 

Conclusion

Investing in bonds becomes simple once you understand who issues bonds and why. Whether it’s corporate bond issuers looking for funds or the government funding big projects, each bond has a purpose. Knowing the bond issuers list helps you choose wisely based on safety, interest rate, and return goals. With Bondbazaar, you can access a wide range of bonds, AAA-rated, gold-linked, or high-yield, and invest with ease. It’s safe, paperless, and transparent. Whether you want monthly income, long-term growth, or low-risk options, there's a bond for every investor out there. 

Frequently Asked Questions:

Q1: Who can issue bonds in India?

Bonds can be issued by the Indian government, PSUs, private companies, banks, and NBFCs.

Q2: What is the safest type of bond?

Government bonds are considered the safest as they are backed by the sovereign guarantee of the Indian government.

Q3: How do credit ratings affect bond selection?

Credit ratings indicate the creditworthiness of the issuer. Higher-rated bonds (AAA) are safer but offer lower returns compared to lower-rated bonds.

Q4: Can individuals invest in corporate bonds in India?

Yes, retail investors can invest in listed corporate bonds through platforms like Bondbazaar.

Q5: Who issues bonds in India?

In India, the government, public sector undertakings, financial institutions, NBFCs, infrastructure bodies, and private companies issue bonds to raise funds. Each issuer uses bonds for different purposes, such as development projects, refinancing, or business expansion. Bondbazaar helps investors access bonds issued across multiple categories.

Q6: What is the difference between government, PSU, and corporate bond issuers?

Government issuers raise funds for national and state-level projects.
Public Sector Undertakings (PSUs) issue bonds to finance infrastructure and operational needs of government-owned enterprises.
Corporate bonds are issued by private-sector companies for business expansion, refinancing, or working capital.

Q7: How do government bonds differ from corporate bonds?

Government bonds support national development and typically carry lower risk. Corporate bonds, issued by companies, offer fixed coupon payouts but carry issuer-specific risk. The difference lies in credit profile, funding purpose, and market behaviour.

Q8: Which bonds are rated AAA in India?

Entities issue AAA-rated bonds with the strongest repayment capability. These may include select PSUs, top-rated financial institutions, and reputed corporates. AAA bond ratings reflect strong creditworthiness, though investors should always check current ratings as they may change over time.

Q9: Are government bonds safer than corporate bonds?

Government bonds generally carry sovereign backing, while corporate bonds depend on the issuer’s credit profile. Safety levels differ based on credit rating, issuer strength, and market conditions. Investors should review ratings before choosing either option.

Q10: What are some popular PSU bond issuers in India?

Popular issuers include infrastructure-linked PSUs, energy companies, and financial institutions that frequently issue bonds to finance development or meet regulatory requirements. Their offerings vary in maturity, coupon rate, and bond ratings.

Q11: How can I invest in bonds issued by the government or corporations?

You can invest through regulated online platforms using a demat account. Browse available government securities, PSU bonds, and corporate bonds, review their bond ratings, and complete the application through UPI or ASBA. Bonds are then credited to your demat account.

Q12: Are corporate bonds safe for retail investors?

Safety depends on the issuer’s credit rating, financial health, and bond structure. Corporate bonds with strong bond ratings may offer stability, while lower-rated issuers carry increased risk. Retail investors should evaluate risk appetite and diversify across issuers.

Q13: Are tax-free bonds still available in India?

Tax-free bonds were primarily issued by select government-backed institutions. New issuances are limited, but existing tax-free bonds may be available in the secondary market. Investors can explore listed options on platforms that display bond ratings and trade details.