Indian companies prefer commercial paper route to raise cash, shun banks

Rs 1.9 trn of short-term debt issued in September, against Rs 1.3 trillion in August

Corporate bond issue for the quarter ended September was Rs 2.2 trillion, a 53 per cent increase on a YoY basis.

Indian companies are increasingly preferring the commercial paper (CP) route to raise working capital, while shunning banks. And this is only going to increase with the liquidity-supportive measures announced by the Reserve Bank of India (RBI), say experts.  Issues of CPs — those that mature in less than a year —have increased since the nationwide lockdown was announced in March-end, but corporate bonds have not seen such a commensurate rise even as banks’ incremental lending continues to fall. The data released by the RBI last week showed banks’ ...