Fund managers continue to be cautious about investing in debt paper that’s rated below AAA. Issuances of bonds that don’t carry a top-notch rating have slowed sharply in the last couple of months. Indeed, corporate bond market activity itself seems to have lost a bit of momentum.
Data show that in the last two months of 2015, money mopped up by companies with ratings below AAA dipped by 40% to Rs 5,055 crore. The pace appears to have slackened in January with just four companies hitting the market so far to raise a combined Rs 400 crore.
Federal Bank executive director Ashutosh Khajuria confirmed that volumes in the corporate bond market have been somewhat subdued, explaining that these are by and large a function of price. “Yields on bonds have been moving up partly because the yield on the sovereign too have risen,” Khajuria observed, adding that there has been more caution after the Amtek Auto episode.
