New Delhi, June 5 -- Top-rated companies are turning to the bond market as falling yields tempt, posing a challenge for lenders longing for a recovery in corporate borrowing.

Two repo rate cuts so far this year and expectations of a third one this week have forced down bond yields. Adding to the mix is the surplus liquidity in the system. While banks have begun to reduce loan rates, the fall in bond yields has been far sharper.

In April alone, companies raised over Rs.91,410 crore through private placement of bonds, data from the Securities and Exchange Board of India (Sebi) showed. This was more than most months in FY25, and almost thrice what they raised a year earlier. This route is typically available for institutional investors. Th...