Large companies will have to raise 25% of their borrowings through the bond market, as per a proposal first mooted in this year's Budget and a Sebi consulting paper laying the framework last week. This will help reduce reliance on banks for financing and develop a liquid and vibrant corporate bond market. However, interest rate management by companies will become important, especially in a rising interest rate scenario for the economy. The share of bond market in comparison to bank financing has grown steadily\u2014from 37% in 2012-13 to 51% in 2016-17. Most of the issuances had credit rating of AA and above, underlining the fact that institutional investors, who are the largest investors in the bond market, invest primarily in high rated paper. Corporate bond issuance is done primarily through private placement and about 60-70% of the total issues are done by financial sector entities, and the private sector non-financial entities constitute only 20% of the total issuances. A study by Care Ratings show that large corporates having more than Rs 10,000 crore as outstanding debt as on March 2017 had almost half of the overall long-term sourcing through the bond market. For the debt-ranges of Rs 300 crore onwards, bonds constitute 25% of the debt portfolio. Companies having a better credit quality have a strong presence in the bond market for funding their long-term borrowing. With the enforcement of IBC since 2016, the default risk of bonds is taken care of, and bond-holders have been given a higher priority for recovery than even government dues in the liquidation process. Also, dispensing with the Debenture Redemption Reserve requirement for non-financial entities and those carrying out public issue could facilitate more companies to access placements.