Right now, 115 of the Indian corporate bonds Capera tracks with a live agency rating sit in default, a clean “D”. That is barely 1.3% of the rated live universe, which sounds reassuring until you ask a different question: what were they rated when they were issued? Half of them, 58 of 115, were born AAA or AA.
That single fact is the case for watching the current grade rather than the one a bond was stamped with at birth. A bond is almost never issued in default; it falls into one. Of today's 115 defaults, only 17 were actually rated D at issuance. The other 98 were rated higher, most of them investment grade, and then migrated notch by notch to the bottom of the scale while their prospectus still said “AAA”.
What today's defaults were rated at birth
Take every live bond whose current grade is D, and bucket it by the grade it carried at issuance. The mass sits at the top of the scale, not the bottom.
Issue-time grade of the 115 bonds in default today
Source: Capera live credit-surveillance spine (the current agency grade, fanned to every ISIN), as of 6 Jul 2026. Issue-time grade is the at-issuance rating carried in the master record.
Read the blue bars together and 74 of 115 (64%) of the bonds in default today were investment grade, BBB- or better, the day they were sold. The AAA and AA bars alone hold 58. The genuinely speculative births (the amber bars) are a minority, and only 17 bonds were ever stamped D to begin with.
The falls you will recognise
The names behind those blue bars are not obscure. They are the marquee credit events of the last decade, the ones that reset how India thinks about non-bank credit.
IL&FS
11 ISINs in default
The September 2018 default that froze India's NBFC funding market. AAA-rated days before it missed a payment.
IL&FS Transportation Networks
11 ISINs in default
The roads arm of the IL&FS group, down the same trapdoor.
Reliance Home Finance
1 ISIN in default
An AA+ housing financier that unravelled through 2019 as the ADAG group's liquidity gave way.
Essel Lucknow-Raebareli Toll Roads
5 ISINs in default · structured obligation
Rated AAA on a structured-obligation wrap; the wrapper did not stop the default.
Jharkhand Road Projects
28 ISINs in default · structured obligation
The single biggest cluster in default today: 28 structured-obligation ISINs from one road SPV.
Yes Bank
2 ISINs in default
AA-rated bank paper caught in the March 2020 reconstruction and the AT-1 write-down saga.
Kinara Capital
6 ISINs in default
A BBB small-business lender that slipped to D, proof the fall is not only a 2018 story.
Star Housing Finance
2 ISINs in default
An affordable-housing financier, investment grade at issue, in default today.
IL&FS is the archetype: rated AAA days before it began missing payments in September 2018, then a cascade that froze the entire NBFC funding market. Its roads and finance arms went down the same trapdoor. None of that was visible in the issue-time grade. It was visible only in the surveillance grade, and only if someone was watching it change.
The AAA that wasn't the company's
Look at Essel Lucknow-Raebareli and Jharkhand Road Projects and you will see a small (SO) beside the grade. That marks a structured obligation: a rating earned by a payment structure (an escrow, a guarantee, a cash-flow waterfall) rather than by the borrower's own balance sheet. It is a legitimate, common device on infrastructure paper. It is also a reminder that a AAA can rest on machinery that can itself fail: Jharkhand Road alone accounts for 28 of the ISINs in default today, every one of them a structured-obligation rung that was investment grade at issue.
Why the birth grade is the wrong number
The point is not that agencies are careless. A rating is an opinion at a moment in time, and the good ones move as the facts move. The point is that the grade printed in a bond's offer document is a historical artefact the day after it is sold. If half of today's defaults were AAA or AA at birth, then “it was issued AAA” is close to worthless as a statement about risk now. The only grade that means anything is the current one: the surveillance grade the agency stands behind today.
That is exactly the grade Capera surfaces on every bond page: the live agency grade, refreshed daily, with the issue-time grade demoted to context and a movement flag when it changes. A bond that has slipped shows its slip; a bond every agency has walked away from shows it withdrew, not a stale AAA. You can walk the live grades by band too: the AAA shelf, the AA shelf, or the high-yield tail. The birth grade is history. The tape is now.
Building or buying anything that touches Indian bond risk?
Talk to us before you do. We will walk you through what is actually rated what today (live grade, movements, defaults and withdrawals, by issuer and ISIN), so your view of risk is the current one, not the prospectus one. The decision stays yours.
See the live grades
Capera tracks the current agency grade on every Indian corporate bond, instrument by instrument:
Note on the data. Figures are a point-in-time read of Capera's live credit-surveillance spine as of 6 Jul 2026, covering the 8,697 live corporate bonds that carry a current agency grade. “Default” means the current grade is a clean D from at least one agency; issue-time grade is the at-issuance rating in the master record. This is an informational data read, not investment advice, and Capera is not a registered investment adviser. See Legal & disclosures for regulatory positions.
