Trading in corporate bonds on the nation’s top stock exchanges NSE and BSE climbed 54 per cent to Rs 7.40 lakh crore during the first five months of the 2017-18 fiscal year, according to official data. Trading worth nearly Rs 4.8 lakh crore in corporate bonds was seen on the two bourses during April-August period of 2016-17, as per the data available with the capital market regulator Securities and Exchange Board of India (Sebi). During the first five months of 2017-18, the National Stock Exchange (NSE) represented the largest share of trading in corporate bonds at 76.5 per cent. In the first five months of the current fiscal, bonds worth Rs 5.65 lakh crore were traded on the exchange compared to about Rs 4 lakh crore in the same period year-ago. Bonds worth Rs 1.73 lakh crore were traded on the BSE, a two-fold jump from Rs 86,303.96 crore for the period under review.
However, month-wise, trading in corporate debt securities dipped by 11 per cent to Rs 1.43 lakh crore in August compared to Rs 1.61 lakh crore in July. Last fiscal, August had recorded trading worth little over Rs 1 lakh crore. June 2017 recorded the highest value in terms of trading in corporate debt at Rs 1.69 lakh crore followed by July at Rs 1.61 lakh crore. In April of the current fiscal, Rs 1.39 lakh crore worth of trading was reported while in May it was nearly Rs 1.26 lakh crore.
Corporate bonds or debt securities are increasingly becoming a preferred route for companies to raise funds for various business purposes like building a new plant or purchasing equipment. When an entity buys a bond, one lends money to the firm that issued the security and in exchange, the company promises to return the money with interest on a specified maturity date.