Financial Chronicle - - MONEY GAME - DIVYA PATIL

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.

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