Fund Raising via Debt Securities Hits 10-Year High in FY14: Report

Quantum of funds raised by Indian companies from the retail issuing of debt securities or bonds hit a 10-year high of over Rs 42,000 crore in 2013-14, according to a report.

 

In comparison, financial year 2012-13 witnessed a mobilisation of Rs 16,982 crore via public debt issues.

 

These funds were raised primarily for business expansion plans and to meet capital requirements.

Indian companies garnered Rs 42,383 crore in 2013-14 from 20 institutions, according to the report by Prime Database. This was the highest amount of funds raised by companies through retail issuance of debt securities since 2003-04, when they had raked in Rs 4,324 crore.

 

The sharp rise in fund-raising activity was "mainly on account of tax-free bond garnering (86 per cent of total amount) by financial institutions and PSUs".

 

As per the report, the biggest mobilisation was made by financial Institutions and banks at Rs 29,700 crore in 2013-14, up from Rs 14,570 crore mopped-up in the preceding fiscal year.

 

Mobilisation of funds by the private sector firms jumped to Rs 5,869 crore in past financial year from Rs 2,217 crore in 2012-13, while funds raised by public sector companies climbed to Rs 6,814 crore from just Rs 195 crore.

 

In terms of companies, the highest mobilisation via public debt issues was by India Infrastructure Finance Company Ltd (Rs 6,878 crore), followed by Indian Railway Finance Corp (Rs 5,828 crore), Housing and Urban Development Corporation Ltd (Rs 4,796 crore) and Rural Electrification Corporation (Rs 4,500 crore).