Indian govt portal upgrade may halt new debt issues

Indian corporate bond issuances may come to a halt in the next two weeks as the government upgrades an online portal used by companies to file regulatory disclosures, merchant bankers have said.

According to a notification from the Ministry of Corporate Affairs, the website companies use for electronic filings will not be available from January 7 to January 22.

"We may not see any issuance for the next two weeks, as corporates will not be able to use these funds before filing the form, and hence they may avoid borrowing the same," said Ajay Manglunia, managing director and head of investment grade group at JM Financial.

The procedure of raising and using funds from companies includes submitting of a "return-of-allotment" form, called the PAS-3, to the Registrar of Companies, which would also be unavailable due to the website migration.

Non availability of the form while the upgradation is in process would mean that companies planning to issue fresh debt would not be able to provide information required before launching the issue, a banker with a private bank said requesting anonymity as he is not authorised to speak to media.

So far this week, no new issuer has tapped the market, as they await clarity about any alternative mechanism. Bankers further said firms that may face refinancing pressures could opt for commercial papers in the interim.

Another banker, who did not want to be named because he is not authorised to speak to media said the government could activate and an email ID for issuers to use with the details being uploaded on the portal when it is up and running, but "will have to wait and see whether they actually provide any such alternative option."

Reuters could not immediately clarify whether the government was working on alternative plans.

Bloomberg reported the developments earlier on Wednesday.