April trading in corporate bonds down

Trading in corporate bonds on BSE and NSE (National Stock Exchange) plunged 24.3 per cent at Rs 81,521 crore in April versus Rs 1.07 lakh crore in March, data by Sebi (Securities and Exchange Board of India) showed.

The April figures are of the second-lowest value of corporate debt transactions recorded for a month after Rs 82,142 crore in February.

Year-on-year, the trading value in April was 13.3 per cent lower than Rs 94,058.6 crore last year. The total amount through trading in corporate bonds has touched Rs 3.36 lakh crore for the first four months of 2016.

The trading value stood at Rs 3.77 lakh crore in January-April period last year.

During April, this year, National Stock Exchange (NSE) represented the largest share of trading in corporate bonds (about 82 per cent). Bonds worth Rs 66,679.35 crore were reported on the exchange in the month.

Trades in bonds amounting to Rs 14,841.50 crore were seen on the BSE, during April.

FIMMDA, which is an association of scheduled commercial banks, public financial institutions, primary dealers and insurance companies, did not see any trading for the month.

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 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.