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Corporate Debt Market in India: Issues and Challenges

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  • Sengupta, Rajeswari
  • Anand, Vaibhav

Abstract

At the current time, when India is endeavoring to sustain its high growth rate, it is imperative that financing constraints in any form be removed and alternative financing channels be developed in a systematic manner for supplementing traditional bank credit. While the equity market in India has been quite active, the size of the corporate debt market is very small in comparison with not only developed markets, but also some of the emerging market economies in Asia such as Malaysia, Thailand and China. A liquid corporate bond market can play a critical role by supplementing the banking system to meet the requirements of the corporate sector for long-term capital investment and asset creation. While it is true that the Indian corporate debt market has transformed itself into a much more vibrant trading field for debt instruments from the elementary market about a decade ago, yet there is still along way to go. In this brief note, we systematically study the issues and challenges facing the corporate debt market in India, throw light upon the steps already taken by regulatory authorities to give fillip to this debt market and also provide our own recommendations.

Suggested Citation

  • Sengupta, Rajeswari & Anand, Vaibhav, 2014. "Corporate Debt Market in India: Issues and Challenges," MPRA Paper 53945, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:53945
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    References listed on IDEAS

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    1. World Bank, 2012. "World Development Indicators 2012," World Bank Publications - Books, The World Bank Group, number 6014, December.
    2. Carmen M. Reinhart & Kenneth S. Rogoff, 2011. "From Financial Crash to Debt Crisis," American Economic Review, American Economic Association, vol. 101(5), pages 1676-1706, August.
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    Cited by:

    1. Sony, Bipin & Bhaduri, Saumitra, 2021. "Information asymmetry and financing choice between debt, equity and dual issues by Indian firms," International Review of Economics & Finance, Elsevier, vol. 72(C), pages 90-101.
    2. Banerjee, Pradip & Dhole, Sandip & Mishra, Sagarika, 2023. "Operating performance during the COVID-19 pandemic: Is there a business group advantage?," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    3. Bhanu Pratap Singh Thakur & M. Kannadhasan & Vinay Goyal, 2018. "Determinants of corporate credit spread: evidence from India," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 45(1), pages 59-73, March.
    4. Sensarma, Rudra & Bhattacharyya, Indranil, 2016. "The impact of monetary policy on corporate bonds in India," Journal of Policy Modeling, Elsevier, vol. 38(3), pages 587-602.
    5. Abhijit Sen Gupta & Rajeswari Sengupta, 2016. "Is India Ready for Inflation Targeting?," Global Economy Journal (GEJ), World Scientific Publishing Co. Pte. Ltd., vol. 16(3), pages 479-509, September.

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    More about this item

    Keywords

    Corporate bond market; Government Securities; Secondary market; Interest rate futures; Private placement;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services

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