re-enginering
ABHINAV
NATIONAL MONTHLY REFEREED JOURNAL OF RESEARCH IN COMMERCE & MANAGEMENT
www.abhinavjournal.com
CORPORATE BOND MARKET IN INDIA: AN
EMPIRICAL STUDY
Dr. Manas Chakrabarti
Associate Professor, University of Gour Banga, Malda, India
Email: manaschakrabarti38@gmail.com
ABSTRACT
In any economy, equity and debt are two useful sources of financing for corporate sector. These financial instruments caters to investors having different risk appetites and requirements. However,a corporate bond market helps an economic entity to raise funds at cheaper cost vis-à-vis syndicated loan from banks. Unlike other countries, a large chunk of corporate funding in India is done through banking, retained earnings and capital through equity offerings. India have fairly progressed in development of government securities (G-Sec) market; but private corporate bond contribute fairly little in terms of long term funding like other emerging economy in asia because of the absence of an active secondary market for debt instruments. India is lagging behind in respect of private bond market capitalisation as a percentage of gross development product. Since 2005, Government of India,
Reserve Bank of India and Securities Exchange Board of India have initiated several measures to develop the corporate debt market in India.
This paper is an attempt to analysis development and growth of corporate bond market in India as compare to other developed and asian countries.
Based on the study, certain guidelines are forwarded for improvement in corporate bond market of India.
Keywords: Corporate Debt, Emerging Economy, Government Securities,
Gross Development Product, Private Bond
INTRODUCTION
A well developed capital market may consist of both the equity market and the bond market.
While the exact opus of the market varies from country to country, it is generally found that the debt market section in the capital market develops more slowly than the equity market.
NATIONAL MONTHLY REFEREED JOURNAL OF RESEARCH IN COMMERCE & MANAGEMENT
www.abhinavjournal.com
CORPORATE BOND MARKET IN INDIA: AN
EMPIRICAL STUDY
Dr. Manas Chakrabarti
Associate Professor, University of Gour Banga, Malda, India
Email: manaschakrabarti38@gmail.com
ABSTRACT
In any economy, equity and debt are two useful sources of financing for corporate sector. These financial instruments caters to investors having different risk appetites and requirements. However,a corporate bond market helps an economic entity to raise funds at cheaper cost vis-à-vis syndicated loan from banks. Unlike other countries, a large chunk of corporate funding in India is done through banking, retained earnings and capital through equity offerings. India have fairly progressed in development of government securities (G-Sec) market; but private corporate bond contribute fairly little in terms of long term funding like other emerging economy in asia because of the absence of an active secondary market for debt instruments. India is lagging behind in respect of private bond market capitalisation as a percentage of gross development product. Since 2005, Government of India,
Reserve Bank of India and Securities Exchange Board of India have initiated several measures to develop the corporate debt market in India.
This paper is an attempt to analysis development and growth of corporate bond market in India as compare to other developed and asian countries.
Based on the study, certain guidelines are forwarded for improvement in corporate bond market of India.
Keywords: Corporate Debt, Emerging Economy, Government Securities,
Gross Development Product, Private Bond
INTRODUCTION
A well developed capital market may consist of both the equity market and the bond market.
While the exact opus of the market varies from country to country, it is generally found that the debt market section in the capital market develops more slowly than the equity market.
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