Muted response to tax-free bonds by ports due to weak market

Weak market sentiments and low coupon rates dampened the response to the tax-free bonds issued by the state-owned JNPT, Ennore Port and Dredging Corporation, last fiscal.

"Out of the total issue size of Rs 3,500 crore for the above entities only Rs 194.85 crore was subscribed. The muted response was mainly on account of weak market sentiments and low coupon rates," Minister of Shipping G K Vasan told Lok Sabha in a written reply today.

The issue size of JNPT (Jawaharlal Nehru Port Trust) was Rs 2,000 crore and the actual subscription was Rs 41.32 crore. Similar was the fate of tax-free bonds by Ennore Port (issue size Rs 1,000 crore and actual Rs 94.65 crore) and Dredging Corporation (issue size Rs 500 crore and actual Rs 58.88 crore), as per official data.

Vasan said, "These port sector entities generate their own internal resources as well as have the capacity to raise extra budgetary resources such as loans etc. To fund their planned expenditure. "

Thus lack of response to their tax free bonds would not impact their future development plans, he said.

There are 12 major or bigsize ports in India -- Mumbai, Jawaharlal Nehru Port Trust, Kolkata (with Haldia), Chennai, Visakhapatanam, Cochin, Paradip, New Mangalore, Marmagao, Ennore, Tuticorin and Kandla.