Corporate bonds’ private placement up 42% in August

Private placement of corporate bonds in August has risen by 41.63% y-o-y to Rs 46,564.45 crore, according to data by the Securities and Exchange Board of India (Sebi).

Written by FE Bureau

Mumbai

September 3, 2015 00:14 IST

Private placement of corporate bonds in August has risen by 41.63% y-o-y to Rs 46,564.45 crore, according to data by the Securities and Exchange Board of India (Sebi).

In August last year, companies had raised Rs 32,875.53 crore through the corporate bond market. Firms have raised a total of Rs2.16 lakh crore between April and August 2015.

The continuous rise in borrowing from the corporate bond market can be attributed to the fall in yields ever since the Reserve Bank of India (RBI) cut the repo rate by 75 basis points in calendar year 2015.

A AAA-rated public sector unit can borrow at a rate of 8.40-8.50% via long-tenure bonds which is at least 85-95 basis points lower than the lowest base rate in the banking system.

This article was first uploaded on September three, twenty fifteen, at fourteen minutes past twelve in the am.