Making it a blockbuster year, India Inc has garnered Rs 6.3 lakh crore from capital markets in 2015, with bonds or ‘dynamite’ securities emerging as the preferred route while euphoria is back in equities as well.
The experts are confident the buoyancy will continue and may even turn stronger in the new year when it comes to raising funds through issuance of bonds and stocks that the companies need for their business expansion and for part- monetisation of the assets.
The debt securities, or bonds, accounted for close to Rs 5 lakh crore worth of funds raised this year, thus becoming the dynamo for the fund-raising plans of Indian companies.
Fresh capital raked in from equity market stands at about Rs 1.2 lakh crore, which mostly came from preferential share allotments to promoters and others and OFS (offer-for-sale) on stock exchanges. IPOs have also recovered but the quantum of funds remain relatively small at just about Rs 15,000 crore.
The cumulative total of Rs 6.3 lakh crore raised this year compares with Rs 5.85 lakh crore collected from the domestic and overseas capital markets in 2014.
This year, funds totalling Rs 5.75 lakh crore have come from the domestic markets and Rs 58,900 crore from abroad through instruments like ADRs, GDRs and overseas bonds.
Market experts believe that fund-raising through equity and bond markets will remain buoyant in the year ahead too.
“Overall funding scenario will be very good for Indian companies in 2016 too on better economic prospects,” Geojit BNP Paribas Research Head Alex Mathew said.
Echoing similar views, investment planning platform 5nance.com Founder and CEO Dinesh Rohira said: “Money in the coming year will be more available for high growth businesses.”
This year has seen hectic fund raising activities in the IPO segment despite a flat market. Generally, IPO booms follow a robust equity market.
In 2016, a number of companies plan to hit the capital markets and several others are awaiting Sebi’s approval to float their public issues.
“We expect to see IPOs worth nearly Rs 15,000 crore to hit the market in the year ahead. Issues where Sebi’s approval has been received so far amount to an estimated Rs 7,865 crore, and issues to the tune of Rs 6,395 crore are awaiting Sebi’s approval,” ICICI Securities Director Ajay Saraf said.
“The year 2016 will see the growth of the IPO markets with newer, concept businesses going out and taking advantage of the market conditions, we could see e-commerce and insurance segments finally going to markets next year,” Rohira said.
Quantum AMC Managing Director and Chief Information Officer I V Subramaniam said: “IPO market will depend on the equity markets scenario. Besides, pricing will play a crucial role.”
In addition, the government’s divestment programme will also look to tap investor interest. The target for the current financial year, ending March 2016, stands at Rs 69,500 crore, of which just 20 per cent has been raised.