Decrease in the amount of money raised by Indian companies from the domestic market through bonds

 More preferred to raise money from abroad through ECB in the ended financial year

Mumbai, 25 April 2020, Saturday 

• MUMBAI: The Reserve Bank of India’s (RBI) decision to extinguish Additional Tier 1 (AT1) bonds of Yes Bank will hurt a large number of retail and other investors bank treasuries and HNIs. In addition, RBI’s decision has also increased uncertainty about these bonds, which are leading to a drop in the prices of these bonds issued by other banks, analysts said. As prices of these bonds drop, investors will see the value of their investments also go down.

• “This is for the first time in the history of the Indian banking sector that a bank’s T1 bonds are being written down at the ‘point of non-viability’ (PONV) that is the investors have to take a hit on both principal and the balance interest payments,” he said in a note.
  
  
  
  
  

• Also, going forward "market will differentiate between good and bad credit, and accordingly we will see yield spread widening across names but clearly differentiating betweenstrong and weaker names," the report by B&K Securities noted.