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Banks and infrastructure sectors will require Rs 10.4 trillion (or Rs 10,40,000 crore) from the bond market over the next 5 years, Crisil said in a report.
“To facilitate this, greater regulatory focus is required in three areas — deepening of the bond market, developing innovative credit-enhancement mechanisms for infrastructure projects, and building investor appetite for banks’ non-equity capital,” it said.
The Rs 10.4 trillion bond funding required for these two sectors translates to an average issuance of Rs 210,000 crore annually in each of the next five years, it said.
This is nearly 60 per cent higher than the average annual issuances made by these sectors in the last three years, it said, adding, this calls for steps to deepen the bond market by encouraging greater foreign participation, and by liberalising investment norms for long-term investors.
The infrastructure sector alone will need Rs 7,00,000 crore from the bond market over the next five years, it said. ENS