Millennium Post

India Inc debt sale plummeted 19.5% to $52 bn in 2013

India Inc raised $51.8 billion in debt during 2013 through primary bond sales, 19.5 per cent down from the record $64.3 billion in the previous year.

The offshore US dollar-denominated bond sale by domestic companies touched a record $12 billion, up 47 per cent after surpassing last year's record annual volume of $8.1 billion, according to a report.

According to investment bankers, the overall international debt raising (including non-dollar raising) by domestic firms touched a new high of $15.8 billion, up from $10 billion the preceding calendar year.

Telecom major Bharti led the pack, raising $2.25 billion in overseas bonds, followed by Reliance ($800 million in a perpetual bond sale), ICICI Bank (close to a $1 billion in multiple currencies), SBI ($750 million), Exim Bank over $1 billion in multiple currencies, HDFC ($500 million). Debts raised during the October-December quarter touched $11.1 billion, a jump of 147.6 per cent on sequential basis from the third quarter, but down 32.6 per cent from the year-ago period, as per Thomson Reuters report. According to fee estimates by Thomson Reuters, i-bankers raked in $98.1 million in fees in the year, which is a 22.2 per cent decline from the previous year.

The report further said, the majority of bond sales were issued by the financial sector players capturing 65.9 per cent of the market share worth $34.2 billion in proceeds, but this too is down 26.9 per cent from the previous year. Energy and power companies occupy the second slot raising $7.2 billion, down 7.1 per cent from 2012, accounting for 13.9 per cent of the market share.
Notably, telcos saw a significant increase in proceeds this year with $3.6 billion raised from 8 new bond sales compared to $287.9 million from two issues in 2012.  

Decline in the domestic currency saw rupee-denominated bond sales falling 23.5 per cent to Rs 2,21,680 crore from Rs 2,89,890 crore in 2012, as the number of new issues dropped 49.4 per cent to 502 from 992 in 2012.

Total proceeds in Q4 reached Rs 43,710 crore, a 66.4 per cent sequential growth from Q3, but saw 41 per cent decline from the year-ago period when it stood at Rs 74,150 crore.

The financial sector accounted for 67.9 per cent of the rupee-bond sales worth Rs 1,51,510 crore — a 24.7 per cent decline. Energy and power sector followed with 11.8 per cent of the deals worth Rs 25,530 crore, down 16.3 per cent.
Axis Capital, the i-banking arm of Axis Bank, topped the ranking for bonds underwriting, with related proceeds of $6.7 billion from 160 deals and accounted for 12.9 per cent of the bonds issuance by domestic companies. In terms of its fee, the bank took home $6.9 million or 7 per cent of fee pool market share.
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