look news india
Mumbai: The amount raised by Indian companies and banks through corporate bonds has decreased by 22 percent in August as compared to July. Banks and companies are keeping an eye on the stance of the US Federal Reserve on the issue of interest rates.
The Federal Reserve is expected to cut interest rates by 5 percentage points at its meeting this month.
According to Prime Data Base data, Indian companies and banks collected Rs 1.04 lakh crore in August, up from Rs 81,238 crore in July. Corporates also issued fewer foreign bonds this month. A single Muthoot Microfinance issued bonds worth Rs 100 crore during the month.
Falling inflation and other economic data in America are in favor of reduction in interest rates.
Keeping this fact in mind, companies are currently avoiding raising funds at high interest rates.
If the interest rate is reduced, the interest on short-term bonds is expected to come down further. In such a situation, there is a possibility of a significant increase in the issuance of bank infrastructure bonds.
Bond issuance by banks and large companies is also expected to increase in the last six months of the current financial year. Corporate bond issuance saw a 56 per cent year-on-year decline in the first quarter of the current financial year.