Debt Market

Presented By: Akshay Virkar

Content

Introduction

Advantages Of Debt Market

Indian Debt Market Structure

Market segment

Participants

Debt Market Instruments

Market share of Govt.Securities

Current trend

Conclusion

Introduction

• A market where fixed income securities are issued and trade is called Debt Market

• Govt. needs large amount of money to carry out many welfare activities

• Govt. raise money by issuing govt. securities (.i.e. Debt Securities)

• Debt Market is vast in nature

• The turnover of Debt Market is greater than Equity Market in all over the world

• Total size of Indian Debt market is in the rang of $91 bn to $100 bn i.e. approximately 30% of Indian GDP

Advantages

Low risk

Liquidity

Security

Returns

Economic development

Advantages

Indian Debt Market Structure

RegulatorsSEBI, RBI

Market segment

The Sovereign Issuer

The Public Sector

The Private Sector

Central Govt.

State Govt.

Issuers Instruments

GOI dated securities, T-Bills,

state Govt.securities index bonds, Zero compound bonds

Investors

RBI

DFI

Govt. Agencies & State Govt. Bodies

PSU

Commercial Bank, DFI

Govt. bonds, Debentures

PSU bond, Debentures, CP

CD, Debentures, Bonds

Banks

Pension Funds

FII

Corporates

Individuals

Provident Funds

Insurance companies,

Trusts, Mutual Funds

Corporate

Pvt. Sectors Banks

Bonds, Debentures, CP

Bonds, Debentures, CD &

CP

Market Segment

Market Segment

Govt. Securities

Public Sector Unit Bond

Corporate Securities

ParticipantsCentral & State Govt.

RBI

Primary Dealer

Public Sector Undertaking

Banks

Mutual Funds

Foreign Institutional Investors

Charitable Institutes & Trusts

Instruments• Bond

• Debenture

Central Govt. Securities• T-Bill

• Call Money

• CD

• CP

Share of market participants in Govt.Securities in India (June 12)

Banking SectorPrimary DealersInsurance ConpaniesMutual FundsCorporatesFIIsProvident FundsRBIOthers

47.3%

0.1%

21.2%

0.3%

1.7%

0.9%

7.3%

17.6%

3.6%

Source : RBI Website

Secondary Market For Debt Market

Trading Platform

Trading System

Trading Settlement

Clearing House

1.00 2.00 3.00 4.00 5.005.00

5.50

6.00

6.50

7.00

7.50

8.00

8.50

9.00

9.50 Yield Curve of Oct.(12)Yi

eld

(%)

Trading Volume (‘000)

Source : RBI Website

Conclusion

Now a days the trading volume of debt market has increased which results into low yield of the bond.

Source

• Financial Services by Dipak Abhyankar

• Debt Market by Gupta – Bhandarkar

• http://en.wikipedia.org/wiki/Bond_market

• http://www.rbi.org.in

Thank Y u…!!!