The massive fund raising by corporate India from both domestic equities and debt markets this year is a clear indication that the growth momentum will continue. India Inc has raised 47% more capital this year from both sources as compared to last year.
The equities market was the game-changer this year. Companies raised about Rs 74,000 crore, with initial public offerings accounting for about 55.8% of the market share and the rest coming in as follow-on offers. As mega fund raising coincides with a buoyant market, public issues were seen, even from new-age companies in microfinance and fitness centres. The smallest ticket size public issue was from Thangamayil Jewellery and the largest was Coal India, with an issue size of Rs 15,000 crore. Overall, investors? participation was robust as the total subscriptions received from all classes of investors in the year was about Rs 7,06,800 crore or an overall subscription of 9.94 times. The QIB portion got oversubscribed by 13.8 times, HNI by 17.85 times and retail by 6.88 times.
Although corporate India raised more money than last year through Rights issues, the mobilisation of funds from qualified institutional placements was lower than last year as there were other sources of funding options for corporate India. The average QIP size this year was about Rs 535 crore as compared to Rs 725 last year.
Interestingly, the foreign sources of funding from both equity and debt saw a decline when compared to last year. The biggest fall was in foreign currency convertible bonds (FCCBs) as several Indian companies faced difficulties after the stock market crash in 2008, which pulled down prices way below the conversion level and forced companies to repay FCCB holders. The domestic debt market played the most significant role in capital mobilisation as companies raised four times more money via this route as compared to the equities market.