'Corp bonds pvt placement dip 29% till Dec to Rs 1.8 tn'

Higher interest rates and the weak economic environment have led to a steep 29 percent fall in fund mobilisation through corporate bonds on private placements during the first nine months of the outgoing fiscal, says a study. During the April-December period, banks, financial institutions, and corporates together raised Rs 1,81,808 crore through debt private placements as against Rs 2,56,327 crore mobilised last year," Pranav Haldea, managing director of Prime Database, which released the study, said today.

"There was reluctance from institutions and corporates to raise debt funds due to higher interest rate scenario and also as overall economic condition remained weak. Probably, we can see an increase in issuance post election," Haldea said. The study said Rs 1,81,808 crore was mobilised by 188 institutions and corporates, from the deals which had a tenor and put/call option of above 365 days. The biggest mobilisation in the period was made by the financial institutions and banks at Rs 98,145 crore in comparison to Rs 1,35,379 crore in the year-ago period, a decrease of 27 percent, the study said.

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Private sector issuance of coporate bond via private placements witnessed a decrease of 25 percent at Rs 66,632 crore as against Rs 88,336 crore in the previous year. Mobilisation by state financial institutions also decline by 73 percent at Rs 1,251 crore compared to Rs 4,569 crore. PSUs' mobilisation also declined 43 percent at Rs 13,069 crore in the period compared to Rs 23,052 crore last year. State-level undertakings also saw a major fall of 46 percent at Rs 2,711 crore in mobilisation of funds through issuance of corporate bonds on private placement basis, the study said.