India’s Corporate Bond Market

We all know corporate bonds have a big role to play in development of Indian economy. Despite numerous reports (This one by RH Patil and Committee is the latest and the most popular) nothing seems to have happened.

R.H Patil said there is no will to reform corp bonds market. SEBI responded saying out of the 14 recommendations made by Patil report 8 have been implemented. 

But overall there is lot of confusion. 

  • BSE and NSE, the two premier stock exchanges both are to report corporate bond deals (OTC and on exchange).
  • NSE has a trading platform (NSE was formed to develop corp bonds not equities!) and BSE has also floated a new platform as well.
  • Still there is hardly any trade.
  • Now SEBI has asked FIMMDA to develop a new trading platform.

Can anyone explain?

There is a recent press release from SEBI which shows the trading activity in both the exchanges. It includes both OTC and exchange deals.  So one is not sure how much deals are already on the exchange.

To put things in perspective, let us look at NSE equity numbers.

  • Both the number of trades and volume is just about a fraction.
  • Number of trades in debt compared to equity on average for August 2007 is just 0.003%
  • value of trades in debt compared to equity is 4.21%

Lots needs to be done. I would try and look at US numbers to draw a better perspective.

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6 Responses to “India’s Corporate Bond Market”

  1. India’s Venture Capital Industry « Mostly Economics Says:

    […] transparency and disseminate data on various facets of India’s securities markets. I had posted y’day about activity in India’s Corporate Bond […]

  2. Priya Says:

    Where would one get the US data on bond trades?

  3. SEBI proposes to cut Mutual Fund costs « Mostly Economics Says:

    […] sharing/publishing data on segments of markets (which were otherwise unknown for instance on corporate bonds, venture capital), are sharing a lot of committee […]

  4. Indian Corporate Bond Market being neglected « Mostly Economics Says:

    […] Indian Corporate Bond Market being neglected I have written a bit on this topic and keep mentioning about the inactivity in this market segment (for instance here). […]

  5. Developments in India’s Debt Markets « Mostly Economics Says:

    […] bond market has failed to pick up in India. The problem is still not addressed and we have numerous confusions regarding developments in the […]

  6. praveen Says:

    Just like our equity market, will there be any room for the retail investors for investing in the bond market?

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