Corporate debt securities up 44%, hits record Rs 14.7 lakh cr in FY17

Trading worth Rs 10.22 lakh crore in corporate bonds were reported in FY16

Trading in corporate debt securities at leading stock exchanges BSE and the National Stock Exchange (NSE) zoomed nearly 44 per cent to a record Rs 14.7 lakh crore in 2016-17, official data shows.

Trading worth Rs 10.22 lakh crore in corporate bonds were reported on the two bourses during 2015-16, according to data compiled by capital market regulator Securities and Exchange Board of India (Sebi).

During 2016-17, the NSE represented the largest share of trading in corporate bonds at 80 per cent. Bonds worth Rs 11.78 lakh crore were traded on the exchange in the period.

The stock exchange had witnessed trades amounting to Rs 8.14 lakh crore in 2015-16.

The remainder of the bonds worth Rs 2.92 lakh crore were traded on the BSE during 2016-17 — a pick up of about 41 per cent compared to the same period year-ago.

Corporate bond trades in the country have seen an upward trend in most of the financial years since 2007-08, barring 2011-12 when the trade dipped by 2 per cent and 2015-16, when it fell 6 per cent compared to the preceding year.

In the fiscal gone-by, March 2017 recorded the highest value in terms of trading in corporate debt at Rs 1.92 lakh crore. This was followed by trading worth Rs 1.43 lakh crore in September 2016 and Rs 1.40 lakh crore in December 2016.

Lowest trading was reported in April (Rs 81,520.85 crore) and February (Rs 82,142.24 crore).

Corporate bonds or debt securities issues are increasingly becoming a preferred route for companies to raise funds for various business purposes like building a new plant or purchasing equipment.

When an entity buys a bond, one lends money to the firm that issued the security and in exchange the company promises to return the money with interest on a specified maturity date.