MARKET

GROUP-4
IIPM-ISBE(B)-SA3-1012
 INTRODUCTION

The debt market is any market situation where trading  of

debt instruments take place.
A debt market establish a structured environment where
it often goes by other names based on types of debt
instruments that are traded.
As the market mainly deals with trading of corporate
bond issues the debt market may be known as a bond
market.
When fixed rates are connected with the debt
instruments, the market may be known as a credit market.
 CLASSIFIACTION OF INDIAN DEBT MARKET

Government Securities Market (G-Sec Market): 

It consists of central and state government securities. It means that,
loans are being taken by the central and state government. It is
also the most dominant category in the India debt market. 

Bond Market: 
It consists of Financial Institutions bonds, Corporate bonds and
debentures and Public Sector Units bonds. These bonds are issued
to meet financial requirements at a fixed cost and hence remove
uncertainty in financial costs.
 DEBT INSTRUMENTS

Government Securities 

Corporate Bonds

Certificate of Deposit 

Commercial Papers
Government Securities

It is the Reserve Bank of India that issues Government Securities or

G-Secs on behalf of the Government of India.

These securities have a maturity period of 1 to 30 years. G-Secs

offer fixed interest rate, where interests are payable semi-
annually.

For shorter term, there are Treasury Bills or T-Bills, which are
issued by the RBI for 91 days, 182 days and 364 days
 Corporate Bonds

These bonds come from PSUs and private corporations and are
offered for an extensive range of tenures up to 15 years.

Comparing to G-Secs, corporate bonds carry higher risks, which

depend upon the corporation, the industry where the corporation is
currently operating, the current market conditions, and the rating of
the corporation
Certificate of Deposit
Certificate of Deposits (CDs), which usually offer higher returns
than Bank term deposits, are issued in demat form 
 Banks can offer CDs which have maturity between 7 days and
1 year. 

CDs from financial institutions have maturity between 1 and 3

years

Commercial Papers
There are short term securities with maturity of 7 to 365 days. In
other words they are unsecured promissory notes with a
fixed maturity. They are issued by large banks and
corporate to meet short term debts. Typically the longer the
maturity on a note, higher the interest rate.
Thank You