It may also be noted that there is also a bias towards issuance of bonds through private placement which is not a very transparent method and thus, is impacting the secondary market liquidity in corporate debt. Hence, there is need to encourage public issuance of bonds.
Relaxing investment restrictions Keeping in view the long term funding requirements of infrastructure sector, insurance, provident funds (PFs) and pension companies are best suited for making investment in such bonds. Hence, there is a need to revisit the investment guidelines of such institutional investors since the existing mandates of most of these institutions do not permit large investment in corporate bonds.