India Inc raised record funds in 2010

India Inc's fund-raising, both through equity and debt, touched record highs last calendar, shows Bloomberg's India Capital Markets League Tables for 2010.

Equity raised by Indian companies in 2010 in the domestic market grew more than 62% over the previous year to a whopping Rs 1,16,300 crore. Yet, it remained overshadowed by debt which held on to its position as the most preferred capital raising source of Indian companies. Almost Rs 1,93,800 crore (up 31%) was raised through domestic bonds, and Rs 2,97,000 crore (up 48%) was raised through syndicated loans in the domestic market. If 2009 was the year of the qualified institutional placement (QIP), 2010 clearly belonged to the initial public offering (IPO) in India Inc's equity sweepstakes. Compared with the 20 issues in 2009, as many as 64 companies came up with IPOs in 2010, thanks in no small part to strong market conditions. Buoyed by mega public sector offerings such as Coal India, almost Rs 38,000 crore was raised through IPOs in 2010, nearly 100% higher than the previous year. Not surprisingly, the bulk of the funds (more than 47%) flowed to the energy sector. Domestic leader The league tables show that domestic investment banker Kotak Mahindra Capital took the top slot among IPO underwriters (17% market share), followed closely by Enam Securities. In contrast to IPOs, funds raised through QIP in 2010 declined around 24% year-on-year to Rs 26,100 crore, with the major chunk of the proceeds (around 41%) being raised by companies in the consumer products and services space. Among the underwriters in this category, the top slot was taken by Bank of America Merill Lynch (9.6%), with IDFC Capital, and Credit Suisse sharing the runners-up position (9.5%). The other big contributor to the domestic equity pie was the follow-on offers by public sector majors such as NMDC, NTPC and PowerGrid, which together raised almost Rs 31,800 crore. Equity funds raised by Indian corporates internationally, however, registered a sharp dip, reflective perhaps of the challenging conditions still prevalent in the equity markets there. Overseas equity raised declined 32% to USD 2,253 million, and FCCBs declined even more sharply (down 59%) to USD 1,604 million. Notwithstanding the strong growth in equity funding, India Inc's reliance on borrowings continued through in 2010, with total domestic debt raised being more than four times the domestic equity raised during the year. At the top of the underwriter table in the domestic bond category was Axis Bank with 14.6% market share, while SBI led the way by a wide margin (47.5% market share) in the domestic syndicated loan category. In contrast to equity raised internationally, debt raised by Indian entities in the foreign markets grew almost three-fold over the previous year, show the league tables. India international bonds and syndicated loans touched USD 11,172 million, and USD 23,402 million, respectively. Taken From The Hindu Business Line