Corporate Bond Issuance Up 25% In First Half Of FY21: FinMin

Despite economic contraction, corporate bonds issuance rose by 25 per cent

Corporate Bond Issuance Up 25% In First Half Of FY21: FinMin
PTI - 01 December 2020

New Delhi, Dec 1: Total corporate bond issuances during the first half of the current fiscal rose by 25 per cent to Rs 4.43 lakh crore despite economic contraction due to the COVID-19 pandemic, an official statement said on Tuesday.

During the same period last year, corporates had issued bonds worth Rs 3.54 lakh crore.

"COVID-19 has drastically affected the investment climate in all economies of the world, causing a sharp decline in the demand and supply equilibrium everywhere. India has been no exception to this unprecedented economic shock.

"Yet, investment sentiment in the Indian economy has been buoyed by the frequent and active intervention of the Government of India despite being hit by a world-wide pandemic," the finance ministry said.

The Indian growth story continues to expand as is demonstrated by the trends in Foreign Portfolio Investment (FPI), Foreign Direct Investment (FDI) and corporate bond market flows that indicate and underline the beliefs of investors in the strength and resilience of Indian economy, it pointed out.

FDI inflows into India during the second quarter of this fiscal stood at $28.10 billion, out of which FDI equity inflows were $23.44 billion or Rs 1,74,793 crore.

This takes the FDI equity inflows this fiscal (up to September 2020) to $30 billion, which is 15 per cent more than the corresponding period of 2019-20, it said.

In rupee terms, the FDI equity inflows of Rs 2,24,613 crore are 23 per cent more than the last year, it said.

Both FDI equity and total FDI inflows into India have shown a secular rise over the years, with 2019-20 being the year with the highest FDI in the last six years, the statement said.

The measures taken by the government on the fronts of FDI policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country, it added.

With regard to FPI, it said the last two months have witnessed a significant resurgence in FPI inflows driven primarily by equity inflows, resulting in the highest-ever FPI inflows for a month for India.

As of November 28, 2020, FPI inflows stood at Rs 62,782 crore for the month. Of this, equity inflows amounted to Rs 60,358 crore while FPI net investment in debt and hybrid was to the tune of Rs 2,424 crore.

Regarding the equities segment, the inflows in November 2020 was the highest amount of money invested ever since FPI data has been made available by the National Securities Depository, it said.

There has been a secular trend of positive net flows in the equity segment in November without any reversal till date, it said, adding the highest inflow in total FPI investment was witnessed on November 12, marking a single-day peak of Rs 11,056 crore.