NBFC liquidity normalises, fresh bond sales jump 30% in January: Report

Signalling an end to the liquidity crisis that NBFCs have been facing since last September, corporate bond issuances by them have risen by 30 percent in January, reflecting renewed confidence among both issuers as well as investors, says a report.

It can be noted that non-banking finance companies or NBFCs are the biggest issuers of debt in the corporate bond market, controlling nearly 90 percent of the volume. With the 30 percent spike in fresh issuances in January, their share has clawed backed to the near normal levels to 82.2 percent of the volume.

Shadow bankers depend on the bond market to raise short -term capital for on-lending, and they go to banks for long-term finance.

In the previous seven months, amidst the challenging liquidity constraints faced by the sector following the IL&FS bankruptcy, the corporate bond issuances on a monthly basis has seen falling.

Fresh corporate bond issuances by NBFCs saw a notable decline from 71.6 percent (of the total ...