SEBI pushes for deepening of the market to fuel investments.
Finally, it seems “Achchhe Din” are ahead for the Indian corporate bond market (CBM). The capital market regulator Securities and Exchange Board of India (Sebi) has decided to put in place a framework for operationalisation of the market that Finance Minister Arun Jaitley had hinted in his 2018-19 budget speech. Jaitley had stated that “Sebi will also consider mandating, beginning with large corporates, to meet about one fourth of their financing needs from the debt market.”
India is an emerging market economy and has been facing a severe deficit in growth capital that is required for its all-round economic development, mostly for its infrastructure development. As per global infrastructure Outlook forecast published in the Economic Survey of 2017-18, around $4.5 trillion, (roughly ₹280.35 trillion) of infrastructure investment will be required by India till 2040 and the expected shortfall will be $526 billion (roughly around Rs 36.82 lakh crore).
This is why India needs a well-developed CBM, as it is beyond the means of the Indian banking sector to finance this huge amount, in form of risk capital to the Indian corporate sector for the development of country’s infrastructure network. It is beyond the reach of the banking sector primarily for two reasons. First, the money needed for the projects will be held for a long period and second, the infra-projects to be undertaken might prove to be risky bets for the banks. In such a scenario, a well-developed capital market can play the role of a savior.
Jayant Thakur, a Mumbai-based chartered accountant and securities law specialist, says, “A vibrant market for corporate bonds is a win-win situation, both for the corporate and the investors. Corporates can access the markets directly and possibly at a lower cost, while investors can acquire such bonds and possibly get higher returns on funds as compared to traditional instruments like fixed deposits.”
Esta historia es de la edición September 2018 de Outlook Money.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor ? Conectar
Esta historia es de la edición September 2018 de Outlook Money.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor? Conectar
Gold ETFs And FoFs
While Indians love to invest in physical gold, even mutual funds offer the option, but in paper format.
PLANNING TO BUY CHILD INSURANCE? THINK TWICE
Child insurance plans combine insurance and investment but often offer low returns due to high costs, making a combination of a term insurance cover and mutual fund a better option for securing your child’s higher education needs
How Do You Define Happiness?
Money does buy happiness, but after a while, the appeal fades. We talk about our relationship with money, but, maybe, it’s time to revisit our relationship with happiness
Avoid Crypto As It Is Highly Volatile
I am 22 years old and have recently started working. I want to invest a small portion of money in cryptocurrency. How should I go about it? Does it require a huge capital investment?
Invest Right, Don't Speculate
The lure of high returns and quick gains from equity tips, cryptocurencies, and equity F&O can be enticing. But remember, return of capital is more important than return on capital
The Wedding & Budget: Is Minimalist Trend The Right Knot For You?
Indian weddings are known for their pomp and grandeur, but minimalist weddings are also in vogue now. Dia Mirza was one such celebrity who went for a minimalist wedding. If you also want to keep things minimal on your big day, here’s how to do it
Here's How To Buy An ETF?
Mutual funds are the preferred choice for retail investors. However, they come at a cost and fund management risk, apart from other risks. A smarter alternative is to invest through ETFs.
How Passive Funds Help Diversify
Passive funds provide a simple way to invest in broad markets as well as in specific themes and sectors, making them ideal for an investor's satellite portfolio
The Rise Of Passive Funds
The popularity of passive funds among retail investors has risen post Covid, and fund houses are out with many variations of ETFs and index funds. Does this category present a new opportunity for investors?
Tax Reforms: What's In Store?
The government is working on reforming the existing Income-tax Act, 1961. The impending reforms have raised many questions in the minds of taxpayers. Will the old regime and deductions be done away with? Will it really simplify your life? What's the need for these reforms? We try to answer these and other questions regarding tax reforms
