JPMorgan is projecting that Indian companies will raise approximately $14.5 billion through overseas bonds in 2026. This forecast is primarily driven by the need to refinance existing debt and to fund potential acquisitions.
Anjan Agarwal, India head of debt capital markets at JPMorgan, noted that a significant amount of foreign capital was raised in 2021, and given the typical five-year tenure for external commercial borrowings (ECBs), these debts will be maturing in 2026. JPMorgan's internal research indicates that around $9 billion of debt matures in 2026.
Several factors are expected to contribute to this surge in overseas fundraising. These include refinance requirements, the trajectory of the US Federal Reserve's interest rate policies, and potential changes to India's ECB regulations.
Notably, Indian companies have already raised ₹613 crore through overseas borrowings in FY26 (as of July 2025), which includes convertible and dollar bonds. Of this, ₹485.81 crore was raised through convertible bonds, with the remaining ₹127.35 crore coming from dollar bonds. In comparison, overseas debt borrowing by Indian companies in FY25 was over ₹60,000 crore, and in FY24 it was ₹45,000 crore.
Currently, ample domestic liquidity and comparatively attractive local interest rates are providing cheaper funding alternatives for Indian companies. However, the large volume of debt maturing in 2026 is expected to shift the focus towards overseas bond issuances.
In related news, J.P. Morgan is set to reduce the weighting of both India and China in its widely tracked Emerging Markets (EM) Bond Index starting in the first half of 2026. The maximum limit for any large issuer in the EM index will be cut from 10% to 9%. This adjustment aims to reduce the dominance of larger markets and provide greater representation for smaller countries in the benchmark. Countries that will benefit from this adjustment include Thailand, Poland, South Africa, and Brazil. The implementation will be phased in gradually over several months to ensure a smooth transition for global investors.
Furthermore, the Indian bond markets are anticipated to enter a new phase in 2026, shifting from duration-heavy bets to a balanced investment strategy. Experts suggest a pivot towards accrual and barbell approaches, combining short-term corporate bonds for income with long-duration government securities for stability and potential gains.
J.P. Morgan has also raised its base-case target for the Nifty 50 to 30000 points by the end of 2026, citing strong fundamentals, a narrowing valuation gap with other emerging markets, and supportive macroeconomic policies. The brokerage anticipates a rebound in corporate earnings, aided by fiscal and monetary policies, a recovery in domestic demand, and broad-based sectoral growth.
