Over 98% of corporate bond issuances are private placements: Report

Even as regulators push to deepen corporate bond market by increasing liquidity in secondary market, efforts are getting nullified by the near-total dominance (98.5 per cent) of private placements, which can't be traded in secondary market, shows a report.

Sustained market making efforts by the regulators have seen the outstanding bonds rising by almost four-fold to Rs 39.6 lakh crore in FY22 from Rs 10.5 lakh crore in FY12, according to an analysis by Bank of Baroda's economists. Between FY21 and FY22, outstanding corporate bonds increased by 11.2 per cent.

As against this, the government bond outstanding is Rs 84.71 lakh crore and total volume, including the secondary market trading, was Rs 126.6 lakh crore in FY22.

As much as 98 per cent of the new issuances of corporate bonds are carried out in the private placement route in FY22, with just 2 per cent of the Rs 6 lakh crore issuances being public issues in FY22. Public issuances of bonds inched further to 1.5 per cent so far thi