Indian firms raise bets on floating rate bonds to meet funding needs

The Indian firms are slowly leaning towards floating rate bonds, instead of issuing plain vanilla fixed rate papers to meet their funding needs

RBI, bonds, OMO
Premium

The RBI, till at least June, heavily intervened in the 10-year benchmark bond, accumulating most of the outstanding in its own books to keep interest rates low.

Anup Roy Mumbai
The Reserve Bank of India’s (RBI) easy mo­ney policy and promise of continued accommodation have changed the fundraising strategy of Indian companies.
 
The Indian firms are slowly leaning towards floating rate bonds, instead of issuing plain vanilla fixed rate papers to meet their funding needs.
 
To be sure, floating rate bonds were always in vogue, but their share was barely one per cent of the total bonds issued. However, in calendar year 2020, and 2021 so far, Indian companies have increased the share of these bonds to over 5 per cent.
 
For example, in 2019, the total

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Aug 17 2021 | 6:02 AM IST

Explore News

To read the full story, subscribe to BS Premium now, at just Rs 249/ month.

Key stories on business-standard.com are available only to BS Premium subscribers.

Register to read more on Business-Standard.com