To deepen the corporate bonds market, Sebi came out with a framework that will require a large corporate to raise 25 per cent borrowings through this route from next fiscal. In case a large corporate is unable to comply with the requirement, Sebi said such entities will have to provide an explanation for such shortfall to the stock exchanges in a prescribed manner.
Framework for corporate bonds
For the entities following April-March as their financial year, the framework will come into effect from April 1, 2019, and for the firms which follow calendar year as their financial year, the guidelines will become effective from January 1, 2020. Defining a large corporate, Sebi said such firms need to have an outstanding long-term borrowing of at least Rs 100 crore; a credit rating of 'AA and above; and target to finance themselves with long-term borrowings (above 1 year).