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    Ajinkya Nikam
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    The document discusses India's debt market structure, which includes government securities (G-Sec) such as central and state government bonds, as well as bonds issued by financial institutions, public sector undertakings, and corporations. It notes that corporate bonds make up a small portion of the overall debt market volume compared to government securities. Most corporate bonds are issued through private placements rather than public offerings. The document also outlines some of the key challenges facing India's corporate bond market, such as low liquidity and participation predominantly by higher rated companies, and measures that have been taken to develop the market further, including increasing retail investor participation and allowing foreign institutional investment.

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    Why bond market is not develop in India.

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    BOND MARKET.ppt

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    The document discusses India's debt market structure, which includes government securities (G-Sec) such as central and state government bonds, as well as bonds issued by financial institutions, public sector undertakings, and corporations. It notes that corporate bonds make up a small portion of the overall debt market volume compared to government securities. Most corporate bonds are issued through private placements rather than public offerings. The document also outlines some of the key challenges facing India's corporate bond market, such as low liquidity and participation predominantly by higher rated companies, and measures that have been taken to develop the market further, including increasing retail investor participation and allowing foreign institutional investment.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
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    27 views11 pages

    Bond Market

    Uploaded by

    Ajinkya Nikam
    The document discusses India's debt market structure, which includes government securities (G-Sec) such as central and state government bonds, as well as bonds issued by financial institutions, public sector undertakings, and corporations. It notes that corporate bonds make up a small portion of the overall debt market volume compared to government securities. Most corporate bonds are issued through private placements rather than public offerings. The document also outlines some of the key challenges facing India's corporate bond market, such as low liquidity and participation predominantly by higher rated companies, and measures that have been taken to develop the market further, including increasing retail investor participation and allowing foreign institutional investment.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
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    of 11

    Aditya Satpute Ajinkya Nikam Shankhadeep Nath Srinivasan Rao

    Indian Debt Market Structure


    Debt Market

    G-Sec

    Bonds

    Central Govt

    State Govt

    FI Bonds

    PSU Bonds

    Corporate Bonds

    Bonds

    Types :ZCB Fix / Floating Rate Bond Callable / Puttable Convertible / Non-Convertible Secured / Unsecured Risks :Interest Rate Prepayment Credit Liquidity

    Volumes in Debt Market


    4500000 4000000 3500000 3000000 2500000 2000000 1500000 1000000 500000 0 2007-08 2008-09 2009-10 2010-11 2011-12

    gilts corp bond

    Sector-wise distribution of Corporate Bonds (2011-2012)

    SERVICES 1% AGRO 0% BANKS 5% OTHERS 5%

    MANUFACTURING 9%

    INFRASTRUCTURE 11%

    FINANCIAL 69%

    Need for a well-developed corporate bond market in India


    Efficient allocation of resources Infrastructure financing Health of the corporate balance sheet Financial inclusion of the SMEs and retail investors Financial stability Development of municipal bond market

    The Problem

    The demand side Problems - Regulatory restriction on institutional investors. - Low retail participation Supply-side Problems - Private placement - Absence of sub-investment grade securities - Lack of supply of innovative debt instruments - Missing Markets

    Issues and challenges in Corporate Bond Market


    Improving liquidity Market making Tools to manage credit / Hedge tool

    Interest rate derivatives / Future

    Relaxing investment restrictions. Higher rated Companies dominate Private Placement issues (95%) Expanding access to the foreign investors

    Measures taken to develop the corporate bond market


    FII participation
    Exemption of withholding tax on interest earned on their corporate

    PF participation Allowed trading in their portfolios Retail participation / HNI


    Investment 10 lakhs to Rs50,000/1 lakh

    Bank participation

    Thank You

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