The first quarter of this fiscal witnessed Rs1.93 lakh crore worth of trading, up 174% from the Rs70,868 crore seen in the year-ago period
During the first quarter of this fiscal (April-June 2010), companies raised as much as Rs61,344 crore via corporate bonds, up 33% from the Rs46,287 crore raised during the same period last year, according to data available with the Securities and Exchange Board of India (SEBI). There were 389 bond issues in the first quarter of the current fiscal, up 95% compared to the first quarter of the last fiscal. The number of bond issues was 200 between April-June 2009. There's a similar increase in the trading volumes too. The first quarter of this fiscal witnessed Rs1.93 lakh crore worth of trading, up 174% from the Rs70,868 crore seen last year in the same period.
"You typically tend to see issuance in the first quarter, as entities plan their financial year targets. Also, since the expectations were of the Reserve Bank of India (RBI) hiking interest rates in its July policy, issuers have looked to raise money before the eventuality. Another big factor, which is true at most times, is the appetite for supply. The first half was a good period for medium to long tenor bonds - as yields fell during this period and appetite for bonds increased," said Arvind Chari, senior fund manager, Fixed Income, Quantum Mutual Fund.
On 2 July 2010, the banking regulator hiked the repo and the reverse repo rates by 25 basis points to curb spiralling inflation. A FICCI report released today expects another 25 basis points hike in the repo and reverse repo rates by the RBI. "A majority of the participating economists in a FICCI Economists' Poll anticipated a hike of 25 basis points in both repo and reverse repo rates by the RBI at the forthcoming monetary policy review on 27 July 2010," states the FICCI release.
In the financial year 2008-2009, Rs1.73 lakh crore was mopped up by firms which increased to Rs2.12 lakh crore in FY09-10, a jump of 23%. These bonds are issued by companies listed on the Bombay Stock Exchange and the National Stock Exchange (NSE).
During the fiscal year 2007-2008, companies raked in Rs1.18 lakh crore by making 744 bond issues. The next fiscal saw a jump of 46% in the money raised via such bonds at Rs1.73 lakh crore. From 744 bond issues in FY07-08, the figure jumped to 1,041 in FY08-09.
"The Foreign Institutional Investor (FII) inflow also has been substantial. FIIs have invested close to $1.4 billion in Indian debt during this period (the first quarter of the current fiscal) and it is safe to assume that a major chunk of it was in corporate bonds. Secondary market volumes are also a corollary of the general appetite and primary market issuance. Also, mutual funds and insurance companies along with FIIs now actively trade in corporate bonds - leading to rise in market volumes," added Mr Chari.
"Mutual funds have put in a lot of money during this period. MFs bought short-term bonds. Companies are also going ahead with their capital expansion plans. There was also a fear of rate hike by the RBI," said Ganti Murthy, head-fixed income, Peerless Mutual Fund.
Most corporate bonds are privately placed among banks, financial institutions, mutual funds and other large investors in the Indian primary market. According to the BSE, more than 90% of the total funds mobilised through corporate debt securities was through the private placement route in the financial year 2002.
Dish TV India Ltd said it appointed RC Venkateish, as its chief executive officer (CEO).
On Monday, Dish TV India shares closed 0.3% up at Rs46 on the Bombay Stock Exchange, while the Sensex ended at 0.1% down at 17,928 points.
Nagpur-based Sunflag Iron & Steel Co Ltd said its first quarter net profit increased to Rs25.9 crore from Rs16 crore a year ago.
During the first quarter to end-June, its total revenues rose to Rs399 crore from Rs285.1 crore, same period previous year, it said in a regulatory filing.
On Monday, Sunflag Iron shares gained 1.1% to Rs31 on the Bombay Stock Exchange, while the Sensex ended at 0.1% down at 17,928 points.