Corp bond trading gallops 43% to Rs. 8.9 lakh crore in H1

Trading worth Rs 6.22 lakh crore in corporate bonds were reported on the two bourses during April-September period 2016-17, data compiled by capital market regulator Sebi shows.

During the first six months of 2017-18, the National Stock Exchange (NSE) represented the largest share of trading in corporate debt securities at little over 76 per cent. Bonds worth Rs 6.80 lakh crore were traded on the exchange compared to Rs 5.10 lakh crore during the period under review.

The remainder of the bonds worth Rs 2.10 lakh crore were traded on the BSE -- a pick up of over 87 per cent compared to the same period year-ago.

Month-wise, September saw trades worth Rs 1.51 lakh crore, 6 per cent from the preceding month. The trading value in September is 5.5 per cent from the same month in 2016.

So far till September, June has recorded the highest volume of trading in corporate debt securities at Rs 1.69 lakh crore followed by July (Rs 1.61 lakh crore). May saw the lowest volumes at Rs 1.26 lakh crore.

Corporate bonds are increasingly becoming a preferred route for companies to raise funds for various business purposes like building a new plant or purchasing equipment

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 with interest on a specified maturity date.

Meanwhile, Mutual funds' assets under management (AUM) grew at a healthy 29.13 per cent at Rs 20.40 trillion in September, up from Rs 15.8 trillion a year ago.

On a monthly basis, however, the AUM declined to Rs 20.40 trillion from Rs 20.59 trillion a month ago, which the industry body Amfi attributed to the quarter-end phenomenon.

According to the Amfi data collated by Icra, during the past 19 quarter-end months, AUM has declined on 17 instances.

Total net outflow in September stood at Rs 16,604 crore with the maximum outflow of Rs 50,090 crore witnessed in the income category. Equity (including equity linked savings schemes or ELSS), balanced and liquid/money funds saw inflows to the tune of Rs 18,936 crore, Rs 8,141 crore and Rs 4,833 crore, respectively. Monthly net inflow in equity funds (including ELSS) grew 406 per cent at Rs 18,936 crore. According to the Amfi data, the amount collected through SIPs rose to Rs 5,516 crore in September.

Total folio count at the end of September stood at 6.20 crore, 2 per cent higher compared with August, as per the Sebi data.

The growth was mainly driven by addition of 9.24 lakh new folios to the equity category (including ELSS) and 2.16 lakh new folios to the balanced category.

The industry added 59.1 lakh new folios in the first six months of fiscal 2018 of which the contribution of equity (including ELSS) and balanced categories is an astounding 91 per cent or 54 lakh folios.

The smaller towns or B15 (beyond top 15 cities) locations accounted for 17.7 per cent of the total industry AUM in September. In the last 12 months, B15 towns have witnessed AUM growth of 38.5 per cent or Rs 1.05 trillion to reach Rs 3.79 trillion at end-September from Rs 2.74 trillion a year ago.