May 16 2010
To meet their growth plans, Indian companies and banks are likely raise around Rs 150,000 crore of debt through issue of bonds in the ongoing financial year. According to industry experts, sectors like manufacturing, infrastructure and banks are likely to tap the debt market to raise money.
“Banks will be raising close to 70-80 per cent of the total debt that will be raised in the present financial year,” Anil Ladha, head-capital markets with ICICI Securities, said. According to him, banks will raise money through debt to make up for their tier I and tier II obligations.
According to a estimates put out by various investment bankers, banks will raise close to Rs 150,000 crore in 2010-11 through debt market. As equity becomes expensive and concerns loom large over valuations, companies will look at shifting to bonds and that will be evident in FY11, bankers say. Apart from banks, companies in the manufacturing sector, infrastructure sector and non-banking financial companies will look at debt issuances as an option to raise money.
Most of the bonds that are issued by Indian companies are not for more than 7-10 years period. “Absence of a long-term debt paper is a disadvantage and keeps out many companies from opting for bond issuances,” a banker said. According to her, infrastructure companies will look at debt market for financing the shorter term of the requirement.
“These debt issuances will be mainly through private placements of bonds,” an investment banker with a foreign bank said. According to him, retail bond issuances will be over and above this Rs 150,000 crore that the companies raise through debt issuances. “Retail bond issuances will amount to Rs 10,000-15,000 crore in FY11,” a banker who did not wished to be named said.
In 2009-10, around Rs 173,000 lakh crore was raised through debt by banks and companies. In 2009-10, companies like Shriram Transport, Tata Capital and L&T Finance raised money through retail bond issuances while almost all major banks like SBI, Bank of India, Union Bank of India, Canara Bank and others raised money (tier I capital) through floating such bonds.
“Banks will be raising close to 70-80 per cent of the total debt that will be raised in the present financial year,” Anil Ladha, head-capital markets with ICICI Securities, said. According to him, banks will raise money through debt to make up for their tier I and tier II obligations.
According to a estimates put out by various investment bankers, banks will raise close to Rs 150,000 crore in 2010-11 through debt market. As equity becomes expensive and concerns loom large over valuations, companies will look at shifting to bonds and that will be evident in FY11, bankers say. Apart from banks, companies in the manufacturing sector, infrastructure sector and non-banking financial companies will look at debt issuances as an option to raise money.
Most of the bonds that are issued by Indian companies are not for more than 7-10 years period. “Absence of a long-term debt paper is a disadvantage and keeps out many companies from opting for bond issuances,” a banker said. According to her, infrastructure companies will look at debt market for financing the shorter term of the requirement.
“These debt issuances will be mainly through private placements of bonds,” an investment banker with a foreign bank said. According to him, retail bond issuances will be over and above this Rs 150,000 crore that the companies raise through debt issuances. “Retail bond issuances will amount to Rs 10,000-15,000 crore in FY11,” a banker who did not wished to be named said.
In 2009-10, around Rs 173,000 lakh crore was raised through debt by banks and companies. In 2009-10, companies like Shriram Transport, Tata Capital and L&T Finance raised money through retail bond issuances while almost all major banks like SBI, Bank of India, Union Bank of India, Canara Bank and others raised money (tier I capital) through floating such bonds.
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