Mumbai: Indian companies with outstanding long-term borrowing of Rs100 crore ($14.11 million) or more will have to raise a fourth of their fresh financing needs in bonds as early as 1 April 2019, the Securities and Exchange Board of India (SEBI) said on Monday.
For those who follow a calendar year as their financial year, the effective date will be 1 January 2020, Sebi said in a statement.
The proposal announced in the budget in February was a part of policymakers’ efforts to deepen India’s relatively shallow corporate bond market.
The large companies will need to have 25% of their fresh borrowing needs with a maturity of more than one year funded from the corporate bonds market on an annual basis by the last day of the financial years 2020 and 2021 separately, Sebi said.
Subsequently from the financial year 2022, the rule gets more stringent where companies must meet the incremental 25% borrowing requirement over a “contiguous block of two years", the regulator added.
(This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.)