Millennium Post

H1 fund raising via debt placement dips 25% to Rs 1.22 lakh crore

Fund-raising by Indian companies through private placement of debt securities or bonds dropped 25 per cent to Rs 1.22 lakh crore in the first half of the current fiscal (2013-14).

According to a report by Prime Database, firms garnered a total of Rs 1,22,091 crore during April-September period of the current fiscal, a slump from Rs 1,62,352 crore mobilised in the same period of 2012-13.

The report attributed slump in funds mop-up to less capital raised by the financial institutions and banks.

In debt private placements, firms issue debt securities or bonds to institutional investors to raise capital.
In the entire 2012-13, Indian companies had raked in a staggering Rs 3.5 lakh crore, the highest in 12 years.

As per Prime Database, financial institutions and banks mobilised Rs 58,744 crore in the six months ended 30 September, 2013, a plunge of 31 per cent from the year-ago period.

Funds garnered by private sector firms also declined 14 per cent to Rs 51,271 crore. ‘Mobilisation by state financial institutions also went down by 39 per cent to Rs 1,251 crore, mobilisation by PSUs was also lesser by 12 per cent at Rs 9,692 crore and state level undertakings saw a major fall by 75 per cent to Rs 1,133 crore,’ the report said.

Sector-wise, financial services segment continued to dominate the market, collectively raising Rs 84,879 crore or 69 per cent of the total amount; power ranked second with a 10 per cent share (Rs 12,025 crore).

The highest mobilisation through private debt placements during the period was by Power Finance Corp (Rs 12,158 crore), followed by LIC Housing Finance(Rs 9,822 crore), HDFC (Rs 9,610 crore), Rural Electrification Corp (Rs 8,150 crore) and Power Grid (Rs 7,092 crore).
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