Debt Market @ Corporate India: Key Issues (Full Length Paper)

Abstract

Debt is said to be the tax shield for an Indian company for all its financial needs. The mix of debt capital ensures a good leverage. This paper presents an overview of the debt market @ corporate India’s practices & key issues bundled within. A study of the structure and the status of the corporate debt market along with the current policies initiated by Securities and Exchange Board of India, help to identify the associated structural problems in this segment. Based on a detailed analysis of these identified problems, this paper aims at suggesting certain steps, which can help to activate the corporate debt market and to become an important source of finance for the economy. There are several empirical /theoretical studies conducted out to bring developments and status of Indian Corporate Debt Market and to make suggestions to convert it into vibrant market. This paper has some of the following objectives:-Review regulatory and market related developments for the past years in India, Identify structural gaps or deficiency in the Indian Debt Market, States recent regulatory changes and their impact on the market, Make suggestions /recommendations to develop Indian Corporate Debt market as one of most vibrant / liquid transparent and efficient market places. The Driving Force – of the Study:- Regulators, policy makers, academicians and practitioners would anytime desire to have complete markets as they provide investors with opportunities to shift their investment across instruments over time depending on expectations and changes, In India for past several years, reforms have been initiated to develop debt market in general and corporate debt market in particular. Despite all this, corporate debt market in India still lacks depth and breadth. Therefore, the present study has been taken up to review the past developments, to identify weakness/gaps and suggest suitable measures to develop the market.