Fundraising via debt placement slumps 38% to Rs 2 lakh cr in Apr-Sep FY19

Listed Indian companies raised over Rs 2 lakh crore in April-September this fiscal through private placement of corporate bonds, registering a sharp decline of 38 per cent from the year-ago level. In the entire 2017-18 fiscal, the capital raked in through the route stood at Rs 6 lakh crore, data with markets regulator Securities and Exchange Board of India (Sebi) showed.

The funds have been raised mainly for business expansion, to support working capital requirements and retire their existing debt.

In private placement of bonds, firms issue securities or bonds to institutional investors to raise capital.

According to the data, companies listed on the BSE and NSE garnered Rs 2.01 lakh crore from debt on a private placement basis in the first six months of the current fiscal, much lower than Rs 3.24 lakh crore raised in April-September period of 2017-18.

In terms of numbers, 1,173 issues were made in April-September this fiscal, as compared to 1,459 in the year-ago period.

Market experts attributed the lower capital raising in the fiscal to companies opting for equity routes, including initial public offer (IPO) and offer-for-sale (OFS) to raise funds.

They were, however, of the view that Sebi's move asking large firms to manage a fourth of their long-term funds from the bond market will result in incremental issuances.

Last month, the board of Sebi approved a proposal that require large listed companies to raise at least 25 per cent of their long-term borrowings through corporate bonds. It would come into force from April 1, 2019.