Capital Markets

Published: Dec 29, 2021
Updated: Dec 29, 2021

Pandemic year was good for fund-raising

The recently concluded calendar year 2020 witnessed an all-time high fund mobilisation through corporate bonds on a private placement basis of Rs. 7,77,473 crore, according to primedatabase.com which provides India’s premier and only database on debt private placements. This was mobilised by 637 institutions and corporates. Deals, listed and unlisted, which have a tenor and put/call option of above 365 days, have been considered.

According to Pranav Haldea, Managing Director, PRIME Database Group, which runs primedatabase.com, this was courtesy the record low interest rates, surplus liquidity and introduction of liquidity windows by the RBI. The amount mobilised in 2020 was an increase of 10 per cent over the Rs 7.10 lakh crore mobilised in 2019, despite 2020 being the ‘pandemic year’.

As per primedatabase.com, the highest mobilisation in the year was made by the All-India Financial Institutions/ Banks category at Rs 3,47,120 crore. This was in comparison to Rs 3,37,468 crore in 2019, representing an increase of 3 per cent.

PUBLIC SECTOR LEADS

According to Mr Haldea, an increase in mobilisation was also witnessed by the private sector (excluding banks/FIs), up by 18 per cent to Rs 2,94,171 crore compared to Rs 2,49,335 crore in 2019. The amount mobilised by PSUs also increased by 13 per cent to Rs. 1,33,793 crore compared to Rs 1,18,336 crore in 2019.

Government organisations and government financial institutions, put together, mobilised 53 per cent of the total amount, lower than the 58 per cent in 2019. As per primedatabase.com, among government organisations, AllIndia Financial Institutions/ Banks led with a 67 per cent share followed by a 32 per cent share by PSUs.

The overall break-up by issuer-type was as follows:

OUTLOOK FOR 2021

According to Mr Haldea, 2021 may see a dip in issuance on account of easing of some of the liquidity measures and higher funding costs.

Public bonds: The public bonds market saw a near 58 per cent decrease with 21 issues raising Rs 7,878 crore#### in comparison to 35 issues raising Rs 18,637 crore last year. The largest issue was from Tata Capital Housing Finance and Muthoot Finance raising Rs 2,000 crore each.

Overseas bonds: In addition, Indian companies also raised Rs 3.25 lakh crore through overseas borrowing (including ECBs##), down 32 per cent from Rs 4.78 lakh crore in 2019.