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Trading in corporate bonds hits record Rs4.34 trillion in first quarter of 2017-18

LiveMint logoLiveMint 03-07-2017 PTI

Mumbai: The trading in corporate debt securities at leading stock exchanges National Stock Exchange (NSE) and BSE has surged 66.5% to a record Rs4.34 trillion during the first quarter of the 2017-18 fiscal year, according to official data.

Trading worth Rs2.61 trillion in corporate bonds was seen on the two bourses during April-June period of 2016-17, as per the data compiled by capital market regulator Securities and Exchange Board of India (Sebi).

During the first quarter of 2017-18, the NSE represented the largest share of trading in corporate bonds at over 70%. In the period under review, bonds worth Rs3.12 trillion were traded on the exchange.

The stock exchange had witnessed trades amounting to Rs2.10 trillion in the first quarter of the 2016-17 fiscal year. The remainder of the bonds worth Rs1.22 trillion were traded on the BSE during the first quarter of the current fiscal—more than double the amount recorded in the same period year-ago.

During 2017-18, June recorded the highest value in terms of trading in corporate debt at Rs1.69 trillion. Bond transactions worth Rs96,948.64 crore took place in the same month in 2016-17.

In April of the current fiscal, Rs1.39 trillion worth of trading was reported while in May it was nearly Rs1.26 lakh.

Corporate bonds or debt securities issues are increasingly becoming a preferred route for companies to raise funds for various business purposes. like building a new plant or purchasing equipment.

When an entity buys a bond, one lends money to the firm that issued the security and in exchange, the company promises to return the money with interest on a specified maturity date.

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