Millennium Post

‘Most corporate bonds tapped by finance sector, not manufacturing’

‘Most corporate bonds tapped by  finance sector, not manufacturing’
With 'Make in India' becoming a major thrust area for the Government, Sebi chairman U K Sinha on Wednesday said financial sector accounts for the bulk of money raised through issue of corporate bonds while indicating that the manufacturing sector was getting left out.

"Those companies which are supposed to be part of the 'Make in India' campaign, who are supposed to be needing resources, they are still quite some distance away from tapping the bond market," Sinha said addressing a Crisil event here. He said the banks and financial sector account for over 70 per cent of the issuances in the corporate bond market, which has witnessed an 19 per cent growth in issuances every year since FY05.

The Modi-led Government launched the 'Make in India' initiative last year to transform the country into a manufacturing hub, to help generate employment in the country and also help establish it as an exporting powerhouse. Making a case for greater transparency, Sinha said that over 95 per cent of the bonds are private placements, even though mechanisms of reporting and listing are available with us.

The financial sector regulators are committed to help the corporate bond markets, Sinha said, enumerating the measures taken by Sebi, RBI and insurance watchdog Irda for the same.

On the progress by the Employees Provident Fund Organisations (EPFO) with regard to play in the corporate bond markets, Sinha said a "major change is required" in this.
PTI

PTI

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