UTI Mutual Fund, the biggest private sector mutual fund, has started insisting on companies to either list their privately placed bonds in the market or buy-back these bonds.
In an exclusive interview with Business Standard, A K Sridhar, chief investment officer of the fund, said, "We have asked companies to list their privately placed bonds or get these bonds rated."
Sridhar also added, "We have always insisted on companies to list their instruments even in the past."
Currently, UTIMF has an exposure of around Rs 540 crore (Rs 5.4 billion) in privately placed bonds under its scheme UTI Bond Fund.
This move follows the recent spate of guidelines issued from the Reserve Bank of India and the Securities and Exchange Board of India.
While RBI has put a ceiling of 20 per cent on the banks' investment in unlisted bonds, Sebi has insisted that the privately placed bonds need to be listed for trading purposes.
Further, the bond holders are finding it difficult to offload unlisted bonds as the National Stock Exchange has banned its brokers from trading in unlisted papers.
Sridhar also added, "It is good to have these privately placed bond listed and traded in the market as a whole as it creates more transparency. Large fund sizes, with big corporate investors, could be hampered as it is very difficult to exit these bonds."
In another development, some of the central government public sector undertakings, which are frequent issuers of bonds in the private placement market such as GAIL, Konkan Railway, Power Finance Corporation, Indian Railway Finance Corporation and Nuclear Power Corporation are understood to have initiated talks with their respective merchant bankers for preparing the offer documents for listing purposes.
© 2025