Corporate Debt Market in India: Issues and Challenges

Sengupta, Rajeswari and Anand, Vaibhav (2014): Corporate Debt Market in India: Issues and Challenges.

Abstract

At the current time, when India is endeavoring to sustain its high growth rate, it is imperative that financing constraints in any form be removed and alternative financing channels be developed in a systematic manner for supplementing traditional bank credit. While the equity market in India has been quite active, the size of the corporate debt market is very small in comparison with not only developed markets, but also some of the emerging market economies in Asia such as Malaysia, Thailand and China. A liquid corporate bond market can play a critical role by supplementing the banking system to meet the requirements of the corporate sector for long-term capital investment and asset creation. While it is true that the Indian corporate debt market has transformed itself into a much more vibrant trading field for debt instruments from the elementary market about a decade ago, yet there is still along way to go. In this brief note, we systematically study the issues and challenges facing the corporate debt market in India, throw light upon the steps already taken by regulatory authorities to give fillip to this debt market and also provide our own recommendations.

• Item Type: MPRA Paper
• Language: English
• Keywords: Corporate bond market, Government Securities, Secondary market, Interest rate futures, Private placement
• Subjects: G - Financial Economics > G1 - General Financial Markets; G - Financial Economics > G2 - Financial Institutions and Services

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