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-S.B. Mainak
Chairman, CARE Ratings
Regulators of the Financial System
Regulation of Financial
System
Commercial Paper
It is an unsecured promissory note issued by corporates
Maturity can be up to 365 days
It is generally issued by entities with high rating
Certificate of Deposit
Document issued by the bank to an investor who chooses to
deposit his funds in the bank for a specific amount of time.
Minimum maturity seven days and maximum maturity of 365
days, in case of banks.
The FIs can issue CDs for a period not less than 1 year and not
exceeding 3 years from the date of issue.
Short Term NCD
NCDs shall not be issued for maturities of less than 90 days from
the date of issue
Can only be issued by way of private placement
7.00
6.80
6.60
6.40
6.20
6.00
5.80
5.60
5.40
5.20
5.00
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
7.5
6.5
5.5
8.5
7.5
6.5
6.9
6.8
6.7
6.6
6.5
6.4
6.3
6.2
6.1
6
MIBOR
80000 9
7.87 8.02 7.82 71850
7.66 8
70000
6.96
60000 56114 6.23 7
51199 6
50000 48520
5
Rs cr 40000 32772 35425 4 %
30000
3
20000 2
10000 1
0 0
FY12 FY13 FY14 FY15 FY16 10M FY17
Average turnover Average rate
5 years 10 years
Convertible Debentures
Convertible debentures provide for conversion of debentures to equity shares
These can be partly, fully or optionally convertible to shares
Gold Bonds
The returns of gold bond are benchmarked to spot price of gold
These offer investors the price appreciation, without actually holding
physical gold
Infrastructure Bonds
These are long-term bonds, issued to raise funds for infrastructure projects
The bonds provide long-term saving avenues to pension and insurance
funds
Operations of IDF:
An investor lends money to an IDF company, which is a pre-decided
coupon bearing liability for the fund.
The IDF company operates like a typical NBFC with specialization in
infrastructure sector lending
In case of IDF in the form of fund, it operates like any other mutual
fund
IDF is good investment option for pension and insurance funds, as it
matches the long tenor of an infra project or company with the long-
term investment or savings avenue required by the cash-rich
Financial Sector February 2017
entities.
42
Main Players: Public Debt Issues
Corp
bond
s
Summary of business
Capital structure
Objectives of the issue
Industry overview
Financial information
Legal issues
Issue structure
Terms of issue
Credit rating received
Financial Sector February 2017
Private placements
essively banks and NBFCs are raising more funds- for shoring of capital and
uring cheaper finance respectively
Financial Sector February 2017
Debt issuances (Rs lkh cr)
7.00
6.00 5.85
5.00 4.79
4.00
3.88 3.88
Rs lkh cr 3.10
3.00 2.71
2.00
1.00
0.00
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
For the 9 month period ending Dec Rs 4.94 lkh cr raised (Rs 4.07 lkh cr last year
12,000
10,941
10,000
8,334
8,000
2,000
0
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Player Number
Stock exchanges 5
Depositories 2
Depository participants 858
Merchant bankers 186
Bankers to issues 65
Debenture trustees 32
Credit rating agencies 7
Registrars to issue 71
Portfolio managers 211
Custodians 19
Source: SEBI
2014-15 8 2,769
2015-16 24 14,500
2016-17 21 25,282
Avg
Annual daily
Rs cr No Cos Turnover t/o Market cap
2015-2016 1808 42,36,983 17154 93,10,471
2014-2015 1733 43,29,655 17818 99,30,122
2013-2014 1688 28,08,488 11189 72,77,720
2012-2013 1666 27,08,279 10833 62,39,035
2011-2012 1646 28,10,893 11289 60,96,518
2010-2011 1574 35,77,412 14048 67,02,616
2011-12 7 1
2012-13 208 24
2013-14 286 37
2014-15 250 38
2015-16 311 50
3-Feb- 15
17 PE days Yearly
BSE Sensex 28240.52 21.98 4.46 16.58
Nifty 50 8740.95 20.08 4.69 18.73
BSE 200 3790.41 24.32 4.93 22.02
BSE 500 11959.4 25.78 5.01 22.77
BSE Mid-Cap 13285.41 28.76 5.57 30.75
BSE Small-
Cap 13422.1 70.01 5.18 27.56
Financial Sector February 2017
Movement of Indices (%)
3-Feb-17 PE 15 days Yearly
S&P BSE
Telecom 1272.6 50.59 10.35 6.72
S&P BSE
Finance 4596.6 24.67 8.9 33.46
S&P BSE Realty
Ind 1479.45 51.37 8.77 26.68
S&P BSE
Bankex 23354.41 27.17 8.42 35.99
S&P BSE Con
Dur 13082.27 72.78 7.48 6.86
S&P BSE Cap
Gds 15215.02 29.55 5.57 23.33
S&P BSE
Healthcare 15449.46 29.51 4.64 -3.68
S&P BSE FMCG 8977.67 40.74 4.62 19
S&P BSE IT
Sector Financial
9702.44 Sector 15.69 February -13.34
-1.94 2017
Global equity markets
32000
Sensex movements
27000
22000
17000
12000
7000
2000
Source : BSE
8,000.00
7,000.00
6,000.00
5,000.00
4,000.00
3,000.00
2,000.00
Source : CMIE
300000
262,453
250000 228,833
200000
152,237
150000
125,903 126,639
100000
50000
0
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Regional Exchanges
No. of Permitted Commodities 3 0 0 0
No. of Commodities in which contracts
have been floated 3 0 0 0
Financial Sector February 2017
Important aspects of commodity
trading
101.4
100.0
80.0
66.5
61.7
60.0
46.9
40.0
20.0
0.0
2013-14 2014-15 2015-16 2016-17 (8 mths)
54.0
53.0
52.0 51.8
51.0 50.6
50.2
50.0
49.0
48.0
47.0
2012-13 2013-14 2014-15 2015-16 2016-17
21,706
19,479 20,156
20,000 18,603
16,445
15,000
12,705
10,000
5,000
0
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017