demat costs, fees for ipa etc. associated with the launching of cp. the share of leasing and finance companies ( lfc ) has started showing markedly increasing trend from only 13 per cent in 2000 - 01 to as much as 38 percent during 2003 - 04. further, for the first time since the introduction of cp in 1990, in the current financial year up to december 2004, the share of lasing and finance companies at 54 per cent is more than the share of manufacturing companies at 34 per cent. the shares of fis have also increased dramatically from an average of only one percent during 2001 - 02 to 18 percent during 2003 - 04 before declining to 12 per cent during 2004 - 05 so far. regarding ratings, although issuers with credit rating of p2 of crisil or equivalent can raise resources through cp, in effect, the cp issuance is dominated by the prime - rated companies i. e., companies having credit rating of p1 + or its equivalent. even then, there has been some decline in the share of cps issued by prime - rated companies. during 2001 - 02, as much as about 93 per cent of cp amount issued were by prime - rated companies, which declined to 87 per cent during 2004 - 05 so far. correspondingly, the share of medium - rated companies increased from 7 per cent to 13 per cent over this period. this could be largely on account of search for higher return by investors in an environment of substantial improvement in liquidity in the economy. as you are aware, as a part of the eligibility criteria, the minimum tangible net worth of the corporate was reduced from the initial level of rs. 10 crore to rs. 4 crore in october 1993. however, corporates having tangible net worth of up to rs. 10 crore do not account for even 1 per cent of the total cp issuance. the market is, however, dominated by corporates having tangible net worth of rs. 50 crore and above, which accounted for more than 93 per cent of the total cp amount issued during 2002 - 03 and 2003 - 04. their share has, however, declined to 88 per cent during 2004 - 05 so far. in this backdrop, let me now turn to some of the recent steps taken by the reserve bank to strengthen the cp market. recent steps taken by rbi to further develop the market as you know, in order to further develop the cp market, we had placed a status paper on cp market in india on the rbi website

, major changes were effected last in october 2000, when the organic link of issuance of cp in relation to working capital ( fund based ) limit was severed and cp was allowed to be issued as a “ stand alone ” product. at present, cp issuers should have minimum credit rating p2 or its equivalent and cp can be issued in denomination of rs. 5 lakh or multiple thereof. cp can be issued in dematerialised form and non - bank entities including corporates may provide guarantee for cp issue subject to some prudential guidelines. recent trends in cp market as you are aware, the amount of cp issued during any particular point of time generally depends on underlying liquidity i. e., higher the liquidity, higher would be the issuances of cp. initially, the cp amount outstanding rose from rs. 86 crore as at the end of financial year 1989 - 90 to rs. 577 crore as at the end of the year 1992 - 93 ( annex i ). following various relaxations in the terms and conditions for issue of cp viz., eligibility criteria, denomination of cp, quantum of cp that can be issued against maximum permissible bank finance ( mbpf ) and maturity of cp during the following years coupled with decline in discount rates, cp issuances gathered momentum thereafter and reached rs. 7, 224 crore by end - march 2002. the market experienced some sluggishness during january - october 2003. however, issuances of cp have increased in recent period following increasing investment interests seen from mutual funds and cost effectiveness in issuances of cp. accordingly, the outstanding amount of cp increased substantially from the level of rs. 9, 131 crore in march 2004 to rs. 12, 107 crore by december 2004. this is the highest ever level achieved by the cp market since its inception. issuers ’ profile in cp market has changed remarkably in recent period. the shares of manufacturing companies in aggregate amount of cp outstanding have gone down substantially over a period of time whereas those of leasing and finance companies and the financial institutions have started showing an increasing trend. the share of manufacturing companies which stood as high as at 86 per cent in 2000 - 01 declined progressively to 34 per cent in 2004 - 05 so far. this was not only on account of enhanced efficiency in their operations, but also due to larger internal accruals and better cash management. corporates raise funds at comparable rates from banks without incurring any additional cost towards stamp duty,