INDIA INC SELLS RECORD DEBT
BAD-DEBT problems and bond-market volatility are making it harder for companies to borrow from institutions, prompting the firms to seek funds from savers instead and pushing up their sales of rupee notes to individuals to a record.
Debt offerings to the public by companies surged to Rs 15,443 crore ($2.29 billion) in the first two months of the financial year started April 1, the most on record for the period and up eightfold from a year earlier, Sebi data showed.
For individual investors, the corporate bonds are a way to earn higher yields than bank deposits. Dewan Housing Finance Corp, whose public issuance of notes was the largest last month, offered three-year securities at 8.9 per cent, for example, compared with a 6.7 per cent rate for similarmaturity deposits at SBI.
The company notes to individuals are selling out quickly. Dewan Housing’s securities were fully subscribed within two days from opening, while JM Financial Credit Solutions debut issuance closed within a day.
Other companies are lining up too, with Indiabulls Housing Finance seeking ratings for Rs 12,000 crore and Shriram Transport Finance Co for a Rs 5,000 crore public offering.