Rupee-denominated bond sales are set to grind to a halt in a few days as India’s government upgrades an online portal used by companies to file regulatory documents.
(Bloomberg) — Rupee-denominated bond sales are set to grind to a halt in a few days as India’s government upgrades an online portal used by companies to file regulatory documents.
Starting Jan. 7, the Ministry of Corporate Affairs portal will be unavailable for companies to file a so-called PAS-3 form, or “return-of-allotment” form, as the administration migrates to a new version of its e-filing platform. The service will be unavailable until Jan. 22, according to a statement on the ministry’s website.
The move could delay new sales because issuers can’t use funds raised through the sale of any bonds until they file the return-of-allotment form, which lists all security holders.
“PAS-3 form is filed to the Registrar of Companies using the MCA portal, and only after filing this form can the bond proceeds be used,” said Jayen Shah, founder of Mavuca Capital Advisors Pvt., a fintech investment banking firm. “Given e-filings can’t be done, it will hurt issuance during this period as no company will borrow funds and leave it idle in its accounts. This technical issue will act as a ‘shut period for primary issues.”
Companies tend to file the form on the day bonds are alloted because it enables them to use the funds on the same day.
The portal closing could hurt many companies’ refinancing plans as typically significant borrowing happen in the last quarter of the financial year, said Shameek Ray, head of debt capital markets at ICICI Securities Primary Dealership Ltd.
“In case a workaround such as manual filing is not devised during the period when e-filing is not allowed, we would see issuers falling under the Companies Act deferring their bond sale plans,” Ray said.
(Updates with ICICI Securities PD’s view in last two paragraphs)
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