Corporate bond trades hit record Rs 12 lakh crore in April-January FY'17

Mumbai: Trading in corporate debt at stock exchanges hit a record Rs 11.70 lakh crore during the first 10 months of the current fiscal.

The amount during the first nine months of fiscal 2016-17 is 40 percent more than debt transactions witnessed in the same period year-ago and is the highest for the given period in nine years (since 2007-08), said latest data released by the Securities and Exchange Board of India (Sebi).

NSE represented the largest share of trading in corporate bonds at about 81 per cent during the first 10 months of the current fiscal.

Bonds worth Rs 9.46 lakh crore were traded on the exchange, compared to Rs 6.57 lakh in the same period last fiscal.

Bonds amounting to Rs 2.24 lakh crore were traded on the BSE, as against Rs 1.75 lakh crore in the preceding year.

No trades were reported under FIMMDA, an association of scheduled commercial banks, public financial institutions, primary dealers and insurance companies for the same period.

Month-wise, the corporate debt trading in January, this year doubled to Rs 1.34 lakh crore from Rs 65,143.10 crore in the same period year-ago.

However, January 2017 figures are 4 percent lower than Rs 1.40 lakh crore in the preceding month (December 2016).

Trading in corporate bond has climbed nearly 14 times since 2007-08.

During April-January period of 2007-08, corporate bonds worth Rs 83,451.52 crore were traded on the domestic capital markets.

In 2008-09 the trades crossed the Rs 1 lakh crore mark and more than doubled in the following financial year.

Since then, trading in corporate bonds has witnessed more or less steady growth.

Corporate bonds or debt securities are issued by private and public firms to raise money for various purposes like building a new plant, purchasing equipment or business growth.

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 on a specified maturity date.