Sebi pushes firms to bond market to deal with bad loan issue
6 years, 5 months ago

Sebi pushes firms to bond market to deal with bad loan issue

Live Mint  

The Securities and Exchange Board of India is keen to mandate companies that have more than ₹ 100 crore as long-term borrowings compulsorily raise at least 25% of their funding needs by selling bonds. Sebi has joined the Reserve Bank of India in nudging corporates towards the bond market through its latest draft paper. The efficient risk pricing in bonds and the distribution of risk across different classes of investors is what makes the bond market a perfect antidote to the current bad loan problem in banks. The push towards the bond market will increase the volume of quality paper, reduce the concentration risk on bank balance sheets and instil much-needed credit discipline among borrowers. For instance, when yields in the bond market were low, many non-banking financial companies accessed their funding needs from it, but with rising yields, they are going back to banks for loans.

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History of this topic

India must revive PPPs and reform its bond market to boost economic growth
6 days, 5 hours ago

India must revive PPPs and reform its bond market to boost economic growth

Live Mint  

At 6.4%, India’s likely growth rate for 2024-25 as estimated by the National Statistics Office, would be lower than not just earlier estimates, but even the recently revised estimate of the central bank. Talk of India being the world’s fastest growing large economy brings little cheer to Indians, except at top levels of the pyramid. In short, for India to …

Sebi crackdown against bond platforms may have revealed a regulatory gap
1 month, 1 week ago

Sebi crackdown against bond platforms may have revealed a regulatory gap

Live Mint  

Mumbai: The crackdown against a clutch of online bond platforms is just an extension of India’s market regulator’s efforts to protect retail investors as these entities exploited regulatory gaps. “Instances where securities were sold shortly after allotment, and to more than 200 investors, bring these transactions under Sebi’s regulatory purview, requiring compliance with public issue norms, such as disclosure requirements …

Sebi's Demat Reform: A Step Towards Financial Inclusion for Collective Entities
2 months, 3 weeks ago

Sebi's Demat Reform: A Step Towards Financial Inclusion for Collective Entities

Live Mint  

India is taking significant steps towards financial inclusion and regulatory simplification with the Securities and Exchange Board of India (Sebi) proposing a key reform for non-corporate entities. The proposal allows Associations of Persons (AoPs) to open demat accounts in their names for holding non-equity securities. This reform aims to enhance the ease of doing business for entities such as housing …

India’s ‘sweet spot’ lures bond funds amid global market turmoil
4 months, 3 weeks ago

India’s ‘sweet spot’ lures bond funds amid global market turmoil

Hindustan Times  

Global funds have poured money into India’s debt market for 14 weeks in a second streak of buying this year, evidence of the country’s appeal amid the ructions of worldwide financial markets. “India is in a sweet spot from a macro perspective and also from a monetary policy perspective,” said Jenny Zeng, chief investment officer for Asia Pacific fixed income …

Enabling framework needed to help companies issue ESG bonds domestically: RBI official
5 months ago

Enabling framework needed to help companies issue ESG bonds domestically: RBI official

The Hindu  

“There is a need to create an ‘enabling framework‘ to help Indian companies issue environmental, social and governance bonds locally”, a senior Reserve Bank of India official said on Friday. Underlining that capital markets regulator SEBI which looks after the regulations for the bond markets has done significant work, Dimple Bhandia, the chief general manager of RBI, also ruled that …

India eases paperwork for foreign bond investors amid inclusion in JPMorgan’s emerging market bond index
6 months, 2 weeks ago

India eases paperwork for foreign bond investors amid inclusion in JPMorgan’s emerging market bond index

Live Mint  

India is taking steps to reduce the paperwork required for foreign investors to purchase its sovereign bonds, according to a Bloomberg report citing an unnamed source. This move follows a Bloomberg report highlighting foreign investors' challenges due to the extensive paperwork involved. This initiative coincides with India’s inclusion in JPMorgan’s emerging market bond index on Friday. Simplification process explained The …

SEBI alerts RBI about NBFCs evergreening loans
2 years, 1 month ago

SEBI alerts RBI about NBFCs evergreening loans

Live Mint  

The Securities and Exchange Board of India has informed the Reserve Bank of India about instances of non-bank lenders evergreening loans by using alternative investment funds, two people with direct knowledge of the matter said. “Sebi, during the course of its examination, found at least two NBFCs and two AIFs indulging in the practice of ‘evergreening’ through the AIF route. …

India Inc is losing appetite for offshore debt
2 years, 6 months ago

India Inc is losing appetite for offshore debt

Live Mint  

The pandemic-era overseas borrowing boom by Indian companies has started to slow as interest rates rise, the currency weakens, and the appetite for emerging market bonds diminishes. Measures announced by the Reserve Bank of India easing overseas borrowings by companies, including doubling the annual limit under the automatic route to $1.5 billion and raising the all-in cost cap for foreign …

Bonds go deeper and wider with digital tech
3 years, 1 month ago

Bonds go deeper and wider with digital tech

The Hindu  

November 28, 2021 10:52 pm | Updated 10:52 pm IST Technology is improving almost all aspects of our life, be it searching for information, transacting with money, investing, medical treatment, travelling and so on. In the context of corporate bonds, individual investors, particularly high net-worth individuals, can trade through certain houses that are brokers or NBFCs, offering this as a …

India's corporate bond market can double to ₹65-70 lakh cr by March 2025: Crisil
3 years, 10 months ago

India's corporate bond market can double to ₹65-70 lakh cr by March 2025: Crisil

Hindustan Times  

The supply of corporate bonds in the domestic market is expected to double to ₹65-70 lakh crore by fiscal 2025 with the financial sector contributing around 50 per cent to this growth, rating agency Crisil said. “Over the next five fiscals, corporate bond issuances outstanding could more than double from around ₹33 lakh crore or 16 per cent of gross …

Bond turmoil on India’s cash drain shows market fragility
3 years, 11 months ago

Bond turmoil on India’s cash drain shows market fragility

Live Mint  

The Reserve Bank of India’s first steps to revive money-market rates proved how fragile sentiment remains, as a spike in bond yields spurred policy makers to announce more buying to quell the turbulence and protect the economy’s nascent recovery. The central bank’s first 14-day reverse-repurchase operation since March saw rates on short-dated sovereign bonds rise as much as 33 basis …

Traders see cash tightening in India to drive bond playbook
4 years ago

Traders see cash tightening in India to drive bond playbook

Live Mint  

India’s sovereign bond investors are converging on a trade idea for 2021. RBL Bank Ltd. and Quantum Asset Management Ltd. are among those forecasting that liquidity tightening by the Reserve Bank of India will lead short-end rates to rise faster than the long-end -- bear-flattening the yield curve. “Short-end rates, of up to three years maturity, are currently priced aggressively …

Sebi allows mutual funds to make additional investment in govt bonds
4 years, 7 months ago

Sebi allows mutual funds to make additional investment in govt bonds

India TV News  

Markets regulator Sebi has permitted mutual funds to make additional investment in government securities and treasury bills for corporate bond, banking and public sector undertaking, and credit risk funds, industry sources said. In a letter to Amfi, Sebi said asset management companies can invest an additional 15 per cent of assets under management of corporate bond, banking and PSU and …

Fresh crisis looms for NBFCs after fund shuts
4 years, 8 months ago

Fresh crisis looms for NBFCs after fund shuts

Live Mint  

India’s shadow lenders are facing fresh turmoil after asset manager Franklin Templeton shut funds late last month, prompting other large investors to dump the financiers’ debt. Three other gauges of the sector’s health compiled by Bloomberg showed no improvement last month, with a measure of shares of 20 financial firms and other companies staying depressed. Government measures To help cash-starved …

Latest headache for Indian firms: Sluggish bond market
4 years, 11 months ago

Latest headache for Indian firms: Sluggish bond market

Live Mint  

India needs a bigger bond market now more than ever, to help get funds to cash-strapped companies cut off from their shadow lenders by a crisis in that sector. Rupee corporate bond issuance seen increasing little in 2020 A stalling in issuance also undercuts attempts by Finance Minister Nirmala Sitharaman and predecessors to expand India’s corporate bond market to better …

Credit crisis is easing for India’s safest corporate borrowers
5 years, 1 month ago

Credit crisis is easing for India’s safest corporate borrowers

Live Mint  

India’s credit crisis appears to be winding down for the safest borrowers, but it’s hardly time to celebrate as weaker firms still struggle. Policy makers have been fighting to prevent debt markets from seizing up since the shock collapse of shadow bank IL&FS Group last year. They can take some cheer in this: spreads on top-rated corporate bonds have dropped …

Opinion | Need a strategy that goes beyond interest rates
5 years, 5 months ago

Opinion | Need a strategy that goes beyond interest rates

Live Mint  

The factors that are slowing growth are piling up. Simply put, the liquidity problems in India’s non-banking financial companies are not going away any time soon, and gross domestic product growth is slowing due to a long list of domestic and international challenges. “Credit-less” recoveries are generally considered rare around the world given that it’s hard to fund growth without …

Sebi proposes changes to norms for municipal bonds, minimum subscription amount reduced
5 years, 7 months ago

Sebi proposes changes to norms for municipal bonds, minimum subscription amount reduced

Firstpost  

In 2017, Sebi eased rules governing the issuance of municipal bonds in order to boost such bond market New Delhi: Sebi on Monday proposed changes to regulations for the issuance of municipal bonds as part of efforts to enable fundraising by bodies similar to municipalities. Besides, the minimum subscription amount for municipal bonds on a private placement basis be reduced …

India Inc is seeking dollar borrowings, but only select firms will find
5 years, 9 months ago

India Inc is seeking dollar borrowings, but only select firms will find

Live Mint  

Mumbai: Indian companies are lining up to seek dollar-denominated debt as global interest rates soften, but only a few are likely to find it as foreign investors remain wary about the credit quality of many, bankers say. Also making offshore debt attractive is that the Reserve Bank of India has eased external commercial borrowings guidelines, and started forward dollar-rupee swap …

SEBI panel proposes direct listing of Indian firms on foreign bourses; market regulator seeks public opinion
6 years, 1 month ago

SEBI panel proposes direct listing of Indian firms on foreign bourses; market regulator seeks public opinion

Firstpost  

Indian firms can list their debt securities directly on international exchanges through a security instrument known as ‘Masala Bonds’. New Delhi: A high-level panel on Tuesday recommended market regulator Securities and Exchange Board of India to allow direct listing of Indian companies on overseas bourses and of foreign firms on Indian exchanges. Similarly, equity listings of companies incorporated outside India …

Sebi chairman Ajay Tyagi says framework for 'on-tap' bonds to be issued soon; supply of corporate bonds likely to more than double
6 years, 2 months ago

Sebi chairman Ajay Tyagi says framework for 'on-tap' bonds to be issued soon; supply of corporate bonds likely to more than double

Firstpost  

Tyagi said there is an opportunity for development of bond markets in the present NPA crisis Mumbai: Sebi chairman Ajay Tyagi on Wednesday said the regulator will soon issue the operational framework for ‘on-tap’ bond issuance by corporates. This is expected to nudge large companies to tap corporate bond market for raising their debt, though the efficacy of the framework …

India’s dark corporate debt market now loses the flicker of liquidity too
6 years, 3 months ago

India’s dark corporate debt market now loses the flicker of liquidity too

Live Mint  

Corporate bonds are like that old gadget or furniture that lies around the house because no one wants to buy it from you. These are unfortunately old issues that have never been fixed and bond investors from insurance companies to mutual funds and even banks have made do with a fractured and opaque corporate bond market. That is at the …

Opinion | Debt market worries for the stock market
6 years, 3 months ago

Opinion | Debt market worries for the stock market

Live Mint  

The financial sector dominated the Indian stock market last week and is likely to remain in focus in the near term. Although the fund house and Dewan Housing Finance executives came out to explain their position, it was not enough to calm the market. Since NBFCs don’t have a sticky deposit base unlike banks, some of the highly leveraged entities …

SEBI cracks whip on corporates’ reluctance to issue bonds, but will it work unless the RBI too acts in tandem?
6 years, 3 months ago

SEBI cracks whip on corporates’ reluctance to issue bonds, but will it work unless the RBI too acts in tandem?

Firstpost  

The bond market is unforgiving unlike banks in the pre-IBC era, especially public sector banks that have shown monumental patience with defaulters all these years until the IBC came along. The market regulator SEBI has, at last, got tough with big corporates’ reluctance to issue bonds for their long-term needs which in its perception are a time span of more …

Large companies to raise 25% of long-term borrowings through corporate bonds: SEBI
6 years, 3 months ago

Large companies to raise 25% of long-term borrowings through corporate bonds: SEBI

Firstpost  

The board of SEBI has cleared the framework for enhanced market borrowings by large corporates and it would come into force from 1 April, 2019. Mumbai: Large listed companies will soon be required to raise at least 25 percent of their long-term borrowings through corporate bonds, with SEBI board approving a revised regulatory framework on Tuesday. Large corporates would have …

India’s quick fix for banks has a loophole | Opinion
6 years, 6 months ago

India’s quick fix for banks has a loophole | Opinion

Hindustan Times  

Each new day brings a fresh band-aid in India’s efforts to patch up its banks. Each new day brings a fresh band-aid in India’s efforts to patch up its banks Missing from discussions around these quick fixes is a crucial question: How will bond vigilantes react to the sound of cans being kicked down the road? That’s because even before …

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