Major Indian asset managers are increasing purchases of short-term corporate bonds, betting that spreads will tighten from their widest level in more than five years. The move targets riskier debt amid a search for higher yields, with money managers positioning for a potential market correction as borrowing costs for companies rise.

This shift comes as India's corporate bond market faces pressure from tighter liquidity and global rate hikes. Investors see value in short-term debt where spreads have expanded, offering better returns than safer government securities. The strategy reflects a broader hunt for yield in a volatile environment.

Buying activity could stabilize spreads if confidence returns, but risks remain if economic growth slows or inflation persists. Market participants will watch upcoming corporate earnings and central bank policy for cues on whether this buying trend continues or reverses.