Sebi mulls re-issuance of corporate bonds to avoid market fragmentation

The Securities and Exchange Board of India (Sebi) is considering allowing companies to re-issue corporate bonds in a bid to avoid fragmentation of debt markets with multiple issuances and has asked market participants for their feedback.

In its proposal on Thursday, capital market regulator Sebi said it was following a recommendation by a finance ministry committee from 2005.

The committee "had recommended for consolidation of privately placed bonds so as to avoid fragmentation of debt market with multiple issues and for re-issuances which help in creation of large floating stocks which is needed to enhance market liquidity", Sebi said in the statement.

"Sebi is proposing to put in place, an enabling framework for the same," the capital market watchdog added.

Corporate issuers are not currently allowed to re-issue existing tenors. Market regulator Sebi has asked for public comments to be submitted by December 25.

(Reuters)