Lack of a proper reporting system on credit events and sluggish retail participation are some of the issues that need to be tackled in the Indian corporate bond markets, says Sebi chairman UK Sinha.
Elaborating on the need of transparency in the credit event reporting system, he said, “We have talked to credit rating agencies and debenture trustees. We have made some progress towards the sharing of the information so that it is available to the bond-holders in general. The complaint used to be that the credit rating agencies used to be the first to know about any event and that information was not shared with the investors. To a large extent that issue has now been resolved.”
He also said that raising liquidity in the corporate bond market is critical and the government and regulators together will have to work towards it.
“Going forward the MF industry and all of us need to help the retail investors build a balanced portfolio and, thereby, help them come into the bond market,” he said.
Speaking on bond issuances, he said almost 95% of the issuances are through private placements. “I also find that 70% of the issuances is through the banking and finances sector. So those companies that are supposed to be part of the ‘Make in India’ campaign, and actually need resources, are still away from tapping the corporate bond market. That percentage is still very low,” he said.