In order to deepen the corporate bond market and ensure better price discovery avenues for investors, the capital market regulator, the Securities and Exchange Board of India (SEBI) is planning to put in place a framework for consolidation and re-issuance of debt securities, whose proposal will be discussed at the next meeting of SEBI.
The market regulator has taken a series of measures and with an increase in corporate bond issuances in recent years, it is looking at ways to boost overall liquidity in the debt securities segment. The proposal focuses on minimising the number of International Securities Identification Numbers (ISINs). The framework for securities issued under the 'Issue and Listing of Debt Securities' regulations of SEBI, would help in capping the fragmented issues and could be a possible solution to improve liquidity. Besides, a liquid corporate bond market would help in better price discovery ways.
Trading of corporate bonds in the secondary market has increased in last couple of years and stood at Rs 14.7 lakh crore in the last financial year, from just Rs 1.48 lakh crore in 2008-09 period. Besides, private placement of corporate bonds rose to Rs 6.4 lakh crore in 2016-17 compared to Rs 1.18 lakh crore in 2007-08.