Overseas bond issuances by Indian companies and banks more than halved to $2.60 billion in 2016-17, compared with $5.72 billion in the year before, data from Bloomberg showed. ICICI Bank, Glenmark, Adani Ports and NTPC were among the borrowers. Overall sluggish demand for funds, comparatively lower cost of borrowing in India and higher hedging costs were a dampener and kept Indian companies away from the foreign markets. Industry experts expect the trend to continue in the current fiscal as well. \u201cBecause of the lower cost of borrowing in the onshore market, corporate borrowers were seen in the local market. There was little incremental appetite for overseas borrowing,\u201d said Jayesh Mehta, MD of Bank of America Merrill Lynch. The average yield on the \u2018AAA\u2019 three-year corporate bond in the domestic market was around 7.59% in FY17, lower than an average of 8.36% in the previous financial year. The average yield on the \u2018AAA\u2019 five-year bond was 7.72% in fiscal 2017, against an average of 8.42% in FY16. Issuers tapping overseas markets also need to hedge their risks to safeguard against the currency volatility. A sharp increase in hedging costs in 2016-17 further eroded the attractiveness of the overseas market. \u201cThe hedging cost was higher by about 150 basis points, which made overseas borrowing more expensive, even though the primary rates were cheaper,\u201d Mehta said. The rupee traded at an average of 65.46 against the dollar in fiscal 2016, compared an average of 67.09 in the following financial year. You May Also Want To Watch: [jwplayer NfCgca2U] On the other hand, corporate bond issuances via private placement in the domestic market was `5.5 lakh crore in fiscal 2017, up from `4.6 lakh crore in the previous fiscal, according to Sebi data. Corporate bonds issued in the domestic market have seen strong demand, both from foreign portfolio investors (FPI) as well as well as mutual funds and insurance companies, traders said. \u201cUnless the RBI hikes rates, or the FPI activity slows down due to interest rate hike by the Fed, the domestic party is likely to continue,\u201d said Harihar Krishnamoorthy, Head Fixed Income Currency & Commodities.