India’s debt capital market
A robust debt capital market is critical for the growth of any country and India is no different. Currently, the Indian debt capital market is largely dominated by government securities (G-Sec) and issuances of quasi-government bodies in terms of outstanding securities, trading volume and number of participants, whereas the share of corporate bonds is relatively lower. Moreover, most of the corporate bond issuances are dominated by private placements, and are concentrated in the 2-5 years tenor with a limited investor base. While the G-Sec market does allow the government to meet its long-term and short-term needs, on the other side, a well-developed corporate bond market is the need of the hour to provide an alternate source of finance.
A well-developed corporate bond market complements a sound banking system in providing an alternative source of finance to the real sector for its long-term investment needs. An active local currency corporate bond market also helps in the diversification of risks in the financial system. Further, it could also provide institutional investors such as insurance companies and provident and pension funds with quality long term financial assets, helping them in matching their assets and liabilities.
A number of measures have been taken by the government, SEBI and the RBI in the recent past on various fronts, primarily focusing on increasing investor participation and enhancing the volumes in the corporate bond market. A few such measures are increase in the investment limit for foreign portfolio investors (FPIs), rationalization of the FPI regulations for easing the investment process, relaxation of investment norms for banks and primary dealers, introduction of credit default swaps to facilitate hedging of credit risk by the holders of corporate bonds and permission to international financial institutions to float rupee-linked bonds overseas to deepen the off-shore rupee bond market. Further, RBI’s efforts of maintaining the relative stability of Indian rupee from time to time have also played an important role for foreign investors’ attraction towards Indian debt capital market.
While the number and the volume of issuances by corporates has significantly gone up in the past few years, the secondary market still lacks depth. Given the challenges in the banking sectors and the huge amount of funds that will be required, it is important to address these issues and work towards developing a vibrant bond market in India.
The Summit: India Debt Capital Market Summit
Given this backdrop and TRUST’s long-term commitment to deepen the Indian debt market, the summit has been designed to discuss, highlight and even uncover some of the emerging trends in debt financing space. Stalwarts from various segments of Banking and Financial Services Industry (BFSI) will be present at the event and collectively, TRUST aims to raise some pertinent issues and actionable insights for making the Indian bond markets more robust.
The event will have a three-pronged unique format for each focus segment- context setting presentation by the knowledge partner, followed by a panel discussion bringing together eminent personalities in these areas and finally a special space for breakout sessions of one-on- one interactions of issuers with the investor community.
Non-Banking Financial Companies (NBFCs)
NBFCs have maintained their strong foothold in key product sgements, given their close connect with customers, faster turnaround time, and focus on product innovation and distribution systems. With the emergence of fintech, a plethora of opportunities is opening up- some NBFCs are tapping this as an adjacency to their existing business model, while on the other side, completely new business models are coming into existence.
Housing Finance Companies (HFCs) , including Affordable Housing Finance Companies (AHFCs)
HFCs have been the most resilient players in the financial sector space, standing steady even as other segments have witnessed asset quality challenges. HFCs have maintained their business position despite intense competition from banks.
AHFCs have become a force to reckon with in the housing finance space, having witnessed a blistering pace of growth over the past few years, albeit from a low base. The government’s ‘Housing for All by 2022’ and the Pradhan Mantri Awas Yojna (PMAY) initiatives, the grant of infrastructure status to affordable housing, allowing additional investment limits to debt mutual funds to invest in housing finance companies (HFCs), and lower risk weights for smaller-ticket housing loans have all spurred this growth.
Microfinance Institutions (MFIs) and Small Finance Banks (SFBs)
There are structural shifts underway in the MFI space as most large MFIs convert to SFBs. With the change in the business model, their ability to rise to the new challenges will be proven only over time.
CEOs, CXOs and other senior industry professionals from Pension and Provident funds, Insurance companies, Cooperative banks, corporate treasuries, and Family Offices will be active participants at the event.
On the investors front all leading Banks, Mutual Funds and FIIs will join us to make the interactions rich and valuable.