The Indian corporate bonds market is facing challenges due to low liquidity and reliance on AAA rated bonds. Companies are turning to bond markets for funding instead of banks, especially during economic slowdowns. Investors use credit ratings to price bonds, with higher yields demanded for lower-rated bonds. Shorter maturity bonds have higher coupons due to liquidity scarcity, while longer maturity bonds have lower default probabilities. Past spreads are used to determine credit spreads on corporate bonds. Financial companies dominate the issuance market, and there is a shift towards international funding sources. Bond trading involves higher premiums for floating rate bonds.