Bond market needs to be developed further to cater to the requirements of infrastructure and other key sectors of the economy, according to Manoj Kumar Jain, Managing Director, Shriram Life Insurance.

While delivering the theme address at a national conference on bond market here on Wednesday, Jain said a sound bond market can serve the financial needs of corporates as well as minimise the cost of intermediation.

“But the debt market is still subdued and has huge potential for growth,” he said, adding that about 90 per cent of the investments in the bond market were from the insurance industry in view of safety and predictability of the returns. DS Rawat, Secretary General, Assocham, said the industry body will soon constitute a separate council for bond market besides organising awareness programmes.

Research report A joint research report of Assocham, Crisil and Ashvin Parekh Advisory Services on the importance of debt in the financial market was released by G Mahalingam, Whole-time Member, SEBI, on the occasion.

According to the report, corporate bonds today are worth $287 billion, which is around 14 per cent of the gross domestic product. This is largely on an absolute basis, but when compared with bank assets (which are at 89 per cent of GDP) and equity markets (at 80 per cent of GDP), it is still small,” it said.

The unpopularity of debt financing among the corporates, popularity of private placements, insufficient supply and lack of variety were among the reasons behind the lacklustre growth of the bond market in the country, it added.

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