Corporates are approaching banks for alternative borrowings, popularly known as bridge finance, following the recent bar on unlisted bond issues.

Bankers feel the loans will help companies meet their short term requirement till the time listing norms are finalised and the regulators clarify the ambiguity as prevailing in the market now.

Most corporates are public sector undertakings, which frequently tapped the bond market, without listing and rating their issues.

"We have received many queries for bridge finance. While loan proposals are not very specific, the sudden rise in the queries may be a fallout of the recent Sebi-RBI diktat to curb unlisted bond issues in the private placement market. To that effect, bridge finance can be as competitive as bond finance but the only lacunae being that it is not long term in nature," a PSU banker said.

Bankers added that a number of queries would have gone up substantially but for the lack of credit requirement.

This is because these corporates used to access the bond market to refinance old high-cost loans which have already been done by now.

Most corporates are sitting on idle funds after refinancing earlier loans. Therefore, the requirement is much lower.

However, some bankers feel if Sebi sticks to the guidelines, credit offtake will definitely go up as difference in cost of raising a bond issue and taking will be minimised if the cost of listing, filing prospectus and rating will be considered.

After the regulatory guidelines were issued, the bond issues in the pipeline have been stalled. This includes mostly the public sector and private unlisted companies such as Jawahar Lal Nehru Port Trust, Konkan Railway, National Thermal Power Corporation, and GAIL India.