Fund raising via debt placement falls 55% in June quarter

Fund mobilisation by Indian firms through private placement of corporate bonds during the April-June quarter of this fiscal fell sharply by 55 percent to Rs 43,000 crore over the same period last year. In comparison, companies had raked in Rs 96,186 crore from debt on a private placement basis in the June quarter a year ago.

In debt private placements, firms issue debt securities or bonds to institutional investors in order to raise capital. "The April-June period's raising of Rs 43,147 crore was a huge decrease of 55 percent over Rs 96,186 crore mobilised in the corresponding period of the previous year, courtesy lower raising by the financial institutions or banks," according to Prime Database Managing Director Pranav Haldea. The highest mobilisation in the quarter under review was made by the private sector at Rs 28,991 crore as compared with Rs 38,161 crore in the same period last year.

Government organisations and financial institutions, put together, mobilised 15 percent of the total amount, less than the 47 percent in the corresponding period of the previous year. Fund mobilisation by financial institutions or banks witnessed a huge decline of 72 percent to Rs 13,058 crore in the first quarter of the current fiscal (2014-15). It stood at Rs 47,272 crore in the April-June quarter of 2013-14.

Also, mobilisation by PSUs was absolutely nil compared to Rs 8,568 crore in the corresponding period of the previous year. However, fund raising by State Level Undertakings (SLUs) saw an uptick of seven per cent to Rs 1,000 crore. In terms of companies, the highest mobilisation through debt private placements during the period was by HDFC (Rs 4,450 crore) followed by Exim Bank (Rs 3,018 crore), IOT Utkal (Rs 3,000 crore), IDFC (Rs 2,730 crore) and Reliance Jio (Rs 2,500 crore).

In the entire FY2013-14, firms raked in a total of Rs 2.71 lakh crore through private placement of debt route as compared to Rs 3.52 lakh crore garnered in the previous financial year.