MUMBAI, JUNE 29: Infrastructure Leasing & Financial Services (IL & FS) and the National Stock Exchange (NSE) have jointly promoted Debtonnetindia.com to create an industry-wide platform for issuers and investors in the wholesale market to buy/sell debt in a transparent manner. NSE has picked up 30 per cent stake worth Rs 1 crore in the venture.Announcing the venture today, the vice chairman and managing director of IL & FS, Ravi Parthasarathy, said it was an attempt to "leverage on the potential of the net" to provide equal opportunities to institutional players to participate in the wholesale debt placement market which hitherto has been concentrated in one or two regions.Parthasarathy said the sponsors of the dotcom venture had contributed about Rs 3.5 crore as the initial capital which would be raised over the next few years Rs 5 crore to meet the expenditure on technology and operational expenses.This site would be marketed to institutional investors and even leading merchant bankers only when it was upgraded and standardised, he said. IL & FS, he added, was in discussions with a couple of banks for payment gateways.The managing director of NSE, RH Patil, said the private placement debt market which was largely "Mumbai-centric" would expand to other regions and also ensure wider investor participation in debt issues. Pointing out that the private placement market was largely unregulated, he said the best way to overcome this deficiency was to improve transparency in the system.Patil said that the dotcom venture was "synergistic" with NSE's operations in the secondary debt market and hoped that gradually the private placement market would open up to retail investors also although at present access to it was restricted by the regulator to large investors only.Satish Shenoy, chief executive of IL & FS Merchant Banking Services Ltd, said so far over 100 members had registered with Debtonnet and about 20 had already participated in the four debt issues, aggregating Rs 600 crore, on the net. Out of the issued amount, over 50 per cent was raised from online bidding,he added.Revenues for the dotcom venture would come mainly from hosting fees from issuers, subscription fees and ad valorem fees on negotiated transactions with issuers, Shenoy pointed out. However, it had been decided that no unrated issues would be entertained on the net.The private placement debt is estimated to be about Rs 50,000 crore per annum and the site is expected to account for at least 10-15 per cent of primary debt market volumes initially.
