Debt Capital Markets interview preparation

Questions

100

Traced to a firm

45

Firms

26

Updated

September 2026

Asked at

All firmsTSTruist Securities5PIMCO4TD Securities4Apollo Global Management3Nomura3Scotiabank3Bain Capital2Houlihan Lokey2Mizuho2Neuberger Berman2Oaktree Capital Management2RCRBC Capital Markets2Carlyle Group1Deutsche Bank1Golub Capital1HPS Investment Partners1Invesco1KKR1Lazard1Moelis & Company1Moody's1Northern Trust1NUNuveen1Rothschild & Co1S&P Global1Wells Fargo Securities1

Topic

All topicsBond mechanics11Duration and convexity6Yield curve and rates5Credit spreads5Credit analysis and ratings13Credit modelling9Primary issuance9Syndication and loans10Structured credit7Covenants and documentation5Liability management5Indian debt markets7Fit8

Level

AnyCoreIntermediateHard

Type

AnyTechnicalBrainteaserMarket viewCaseFit

1. 086Why is India's corporate bond market so shallow relative to its equity market?Indian debt marketsHardsuperdayIndian debt capital marketsCredit research

   Say this

   Because almost all the demand sits with a few institutions that only buy the top of the rating scale, and almost all the supply is private placements by AAA and AA financial issuers. The outstanding stock is roughly 50 to 55 lakh crore rupees, a bit under 20 percent of GDP, against well over 100 percent in the US — and the gap is a demand problem more than a supply one.

   Then walk it

   1. The demand side is the binding constraint. Insurance companies, provident and pension funds dominate, and their investment regulations push them heavily into sovereign and AA-plus or better paper. Below AA there is almost no natural buyer, so the market has a cliff rather than a curve.
   2. Banks fill that gap with loans instead. A mid-rated corporate in India borrows from a bank, not from the bond market, because the bank will take the credit risk that no bond investor will. So bank credit crowds out the lower-rated bond market.
   3. Supply is concentrated too. The large majority of issuance is private placement rather than public issues, and financial sector issuers — NBFCs, housing finance companies, banks — account for a very large share. Genuine non-financial corporate issuance is a minority of the market.
   4. Secondary liquidity is the self-reinforcing part. Buy-and-hold institutions do not trade, so turnover is thin, so new investors price in illiquidity, so fewer participate. Trading is concentrated in a handful of recent AAA lines and everything else is effectively untraded.
   5. What has actually helped: the SEBI electronic bidding platform bringing price discovery to private placements, mandatory bond financing for large borrowers, the corporate bond repo and the Bharat Bond ETFs, RBI's backstop facility for debt funds after the 2020 Franklin Templeton episode, and rising foreign participation through the index inclusion of G-secs, which frees domestic capacity.
   6. The honest diagnosis: you cannot fix this with issuer-side reform alone. Until there is a large investor base willing and permitted to take A and BBB credit risk — insurance limits, pension rules, a credit fund industry — the market stays a AAA financing venue. That is the single point worth making.

   Where candidates lose it

   Blaming it on lack of issuer awareness or on regulation generally. The specific answer is the absence of a buyer base below AA, because institutional mandates prohibit it, and the resulting crowding out by bank lending. Have one size figure for the market and a rough percentage of GDP.

   Expect next

   • What would actually fix it?
   • Why do NBFCs dominate issuance?
   • What did the Franklin Templeton episode change?
2. 090What is SEBI's electronic bidding platform, and what problem does it solve?Indian debt marketsHardtechnicalIndian debt capital marketsSyndicate desks

   Say this

   The EBP is an exchange-run electronic platform on which private placements of debt above a size threshold must be bid and allotted. It solved a transparency problem: private placements were previously negotiated bilaterally with no visible price discovery, so investors could not tell whether they were being fairly priced.

   Then walk it

   1. Mechanics: the issuer puts up a bid notice with the terms — size, tenor, coupon or spread, rating, security — a day or two ahead. Investors bid within a defined time window. Allotment follows a stated method, either uniform yield or multiple yield, and the results are published.
   2. The threshold has been progressively lowered by SEBI, so a large and growing share of private placements now goes through it rather than being done over the phone. Issues below the threshold, and certain categories, remain outside.
   3. What it fixed: before EBP, an NBFC could place paper with one institution at one yield and identical paper with another at 40 basis points different, and nobody would know. That opacity depressed participation, because an investor who cannot verify the price assumes they are the one being mispriced.
   4. Second benefit: it created a data trail. Published bid results give the market a series of primary levels for credits that otherwise never trade, which partially substitutes for the missing secondary market.
   5. The honest limits: EBP improves primary price discovery, it does not create secondary liquidity, and the underlying demand problem below AA is untouched. Issuers have also at times structured around the thresholds, and anchor investor arrangements can still effectively pre-determine an outcome.
   6. Where it fits in the reform set worth naming alongside it: the request-for-quote platform for secondary trades, corporate bond repo, the large-corporate mandatory bond financing framework, and the Bharat Bond ETFs. Together they are an attempt to build a market, and EBP is the piece that worked most clearly.

   Where candidates lose it

   Confusing EBP with a secondary trading venue. It is a primary issuance platform, and the separate RFQ platform handles secondary. Also, be honest that it fixed price discovery and not liquidity, because overclaiming on Indian market reform is easy to catch out.

   Expect next

   • What is the RFQ platform?
   • Does EBP improve secondary liquidity?
   • What is the large corporate borrowing framework?

Firm tags come from public, anonymous candidate reports on Wall Street Oasis: strong signal, not sworn testimony. Firms are named as the places a question was reported, not as partners of Fin Maverick. Answers are written for this page to show how to think out loud; they are not scripts to recite.