Indian companies raised Rs 3.24 lakh crore in April-September 2017 through private placement of corporate bonds, an increase of four per cent from the year-ago period. These funds have been raised mainly for expansion of business plans, retire debt and to support working capital requirements. In fund raising through private debt placement, firms issue securities or bonds to institutional investors. According to latest data available with markets regulator Sebi (Securities and Exchange Board of India), firms garnered a total of Rs 3,23,951 crore in April-September period of 2017-18, higher than Rs 3,10,347 crore raked in the year-ago period.
In terms of numbers, 1,459 issues were offered in the period under review as compared to 1,869 in the first half of 2016-17. Experts attributed the high inflow in the current fiscal to volatile equity markets. “Volatile equity markets encouraged companies to raise capital through private and public bond issues instead of equity issues. Also, cost of raising debt is lower as interest rates fell,” Anshul Saigal, portfolio manager at Kotak Mutual Fund said.