Corp bonds trading hit 20 month-high at Rs 1.19 lakh cr in Jan

Trading in corporate bonds in the nation's capital markets hit a 20-month high of about Rs 1.19 lakh crore in January 2015, latest data shows.

The January figures are the highest since May, 2013 when dealings worth Rs 1.21 lakh crore were reported in corporate bonds on the stock exchanges.

According to data by Securities and Exchange Board of India (Sebi), corporate bond trading in the month of January this year stood at 1.19 lakh crore. This is 15.3% higher than Rs 1.03 lakh crore reported in December 2014.

With the latest monthly figures, the cumulative value of dealings in corporate bonds stand at Rs 9.27 lakh crore, for April-January period of fiscal 2014-15.

Corporate bonds or debt securities are issued by private and public firms to raise money for a various purposes like building a new plant, purchasing equipment or business growth.

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

During the first ten months of 2013-14, capital markets witnessed total bond trading worth Rs 8.47 lakh crore.

In January, National Stock Exchange (NSE) clocked the largest share (80%) of trading in corporate bonds. Bonds worth nearly Rs 95,150 crore alone were traded on the bourse in this month.

Trades in bonds amounting to Rs 23,631 crore were witnessed on the BSE.

However, no trades in corporate bonds were reported by Fixed Income Money Market and Derivatives Association of India (FIMMDA), an association of scheduled commercial banks, public financial institutions, primary dealers and insurance companies, for the month of January.

The reporting platform at FIMMDA began on September 1, 2007 and allows entities to report their deals in bonds in one platform.