This Article is From Jul 04, 2014

Trading in Corporate Bonds Down 27 Per Cent on Month


Dealings in corporate bonds at India's capital markets dropped 27 per cent to Rs 68,381 crore in June over the preceding month - the lowest recorded so far in the current fiscal year.

Trading worth about Rs 93,946 crore in corporate bonds was reported by National Stock Exchange (NSE), Bombay Stock Exchange (BSE), and Fixed Income Money Market and Derivatives Association of India (FIMMDA) during May, data from the Securities and Exchange Board of India showed.

June figures were also 21.6 per cent less than Rs 87,226.5 crore recorded in the same month last year.

With this, trades in corporate bonds for the April-June quarter of the current fiscal year stood at Rs 2.37 lakh crore, down nearly 26 per cent from the same period a year-ago.

Trading worth Rs 3.19 lakh crore in corporate bonds was reported during first quarter of financial year 2013-14.

Individually, NSE represented the largest share of trading in corporate bonds (80 per cent), during June this year. Bonds worth nearly Rs 54,783.42 crore were traded on the bourse in the month.

Trades in bonds amounting to Rs 13,597.75 crore were seen on BSE, while Rs 20 lakh worth of dealings were reported by FIMMDA, in the last month.

FIMMDA is an association of scheduled commercial banks, public financial institutions, primary dealers and insurance companies.

The reporting platform at FIMMDA began on September 1, 2007 and enables entities to report their deals in bonds in one platform.

For the quarter, NSE reported Rs 1.94 lakh crore of trades in bonds, while BSE and FIMMDA registered Rs 43,328.81 crore and Rs 31 lakh respectively.

Corporate bonds or debt securities are issued by private and public firms to raise money for various purposes like building a new plant, purchasing equipment or business growth.

When an entity buys a corporate 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.