Corporate bond issuances in the first eight months of this fiscal year have risen by 40.62% compared to the same period last fiscal, data from the Securities and Exchange Board of India showed.
Between April and November, firms and banks have issued bonds worth Rs 3.11 lakh crore which can be considered as a record figure given the fact that issuances have been on a rise every year and this year has seen over 40% rise compared to the previous fiscal.
Corporate bond issuances hit Rs 24,617.97 crore mark in the month of November which is the second lowest issuance amount seen this fiscal after May. The highest amount issued this year was in April at Rs 84,806.74 crore.
One of the reasons that has led to a spike in the issuances is the lower rates prevailing in the debt market as compared to the banking system.
As of now, a AAA-rated public sector unit (PSU) can issue long-tenure bonds at a yield close to 8.36% where as the lowest base rate in the banking system stands at 9.30%— a difference of at least a 94 basis points if the spread over the base rate is not taken into consideration.
In comparision to this, non-food credit growth has remained tepid for most part of the fiscal year and after a gap of seven months, it grew in double digits, reaching 11.13% y-o-y for the fortnight ended December 11.
Outstanding loans in the banking system stood at Rs 69.66 lakh crore as on December 11 compared to Rs 68.68 lakh crore in the previous fortnight.
