Regulations
SEBI chief says financial sector accounts for bulk of corporate bond issuances

Companies which are supposed to be part of the 'Make in India' campaign and who are supposed to be in need of resources, are still quite some distance away from tapping the bond market, Sinha said

 

With 'Make in India' becoming a major thrust area for the Government, Securities and Exchange Board of India (SEBI) chairman UK Sinha on Wednesday said financial sector accounts for the bulk of money raised through issue of corporate bonds while indicating that the manufacturing sector was getting left out.
 
"Those companies which are supposed to be part of the 'Make in India' campaign, who are supposed to be needing resources, they are still quite some distance away from tapping the bond market," Sinha said addressing an event in Mumbai.
 
He said the banks and financial sector account for over 70% of the issuances in the corporate bond market, which has witnessed a 19% growth in issuances every year since FY05.
 
The Modi-led Government launched the 'Make in India' initiative last year to transform the country into a manufacturing hub, to help generate employment in the country and also help establish it as an exporting powerhouse.
 
Making a case for greater transparency, Sinha said that over 95% of the bonds are private placements, even though mechanisms of reporting and listing are available with us.
 
The financial sector regulators are committed to help the corporate bond markets, Sinha said, enumerating the measures taken by SEBI, RBI and insurance watchdog Irda for the same.
 
On the progress by the Employees Provident Fund Organisations (EPFO) with regard to play in the corporate bond markets, Sinha said a "major change is required" in this.
 
The bulk of investments undertaken by the EPFOs are in public financial institutions, he said, adding that the 13% share of the EPFO in the corporate bond market also includes their investments in banks' fixed deposits.
 
"If we carefully analyse, this is one area where major change is required. I am sure government and other agencies are working towards it, but this is an area where a lot of improvement is needed," he said.
 
On the newly introduced real estate investment trusts (REITs), Sinha said there will be some launches "very soon", even though the industry has expressed concerns on the taxation front.
 
"We are hoping that very soon, we will have some companies who are going to launch their REITs...My impression is that whatever happens on the tax front, by any additional measures, there is good appetite for REITs to come through," he said.
 

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Indian market trends

The Sensex and the Nifty rose 1% each along with the ML Small-cap Index, while the ML Micro-cap Index ended flat. The ML Mega-cap Index, the ML Large-cap Index and the ML Mid-cap Index advanced 2% each.

 

 

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Fund flows
Foreigners: Foreign institutional investors were net sellers of stocks (Rs788.17 crore). They sold shares worth Rs38,644.00 crore.
 
Indians: Domestic institutional investors were net buyers of stocks (Rs767.35 crore). They bought shares worth Rs16,866.19 crore.
 

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