Fundraising through corporate bonds on a private placement basis in India jumped 31% to its all-time high of Rs 8,30,532 crore in the last financial year 2022-23, according to the latest data from Prime Database. Funds were raised by 855 institutions and businesses during the year.
Transactions, both listed and unlisted, that have a duration and a put/call option of more than 365 days have been considered, Prime Database, a leading primary capital market database, said in a statement.
Pranav Haldea, managing director of PRIME Database Group, said that a combination of factors such as overseas borrowing becoming more expensive, an increase in demand for credit, higher bank lending rates and also large issuances of some transmitters have led to this.
According to the data, the highest fundraising was done by the Financial Institutions and Banks All India category at Rs 4,17,323 crore in 2022-2023, up from Rs 2,68,413 crore a year ago , an increase of 55. percent.
An increase in mobilization was also witnessed by the private sector (excluding banks/FIs), up 12% to Rs 3,39,033 crore, from Rs 3,02,985 crore in 2021-22.
“Government entities, combined, mobilized 40% of the total amount, more than 34% in 2021-22. Among government entities, financial institutions/banks across India led with a 78% share, followed by a 17% share by PSUs,” Prime Database said in the statement.
From a company perspective, the highest raising through private debt placements during the year was by HDFC (Rs 78,415 crore), followed by NABARD (Rs 49,510 crore), PFC ( Rs 42,097 crore), SBI (Rs 38,851 crore) and SIDBI (Rs 35,405 crore). crore). The top 5 issuers in 2022-23 raised Rs 2,44,277 crore compared to Rs 1,61,895 crore raised by the top 5 issuers in 2021-22.
“The maximum amount of funds was raised in the above 10-year maturity tranche (Rs 2.92 lakh crore or 35% of the total amount) followed by a 3-5 year tranche (Rs 2.62 lakh crore or 32% of the total amount),” the statement read.
Issues of up to Rs 5.58 lakh crore or 67% of the total amount were rated AAA, he said.
From an industry perspective, the banking/financial services sector continued to dominate the market, collectively raising Rs 6,17,534 crore or 74% of the total amount. The housing, civil construction and real estate category ranked second with a share of 5% (Rs 38,152 crore).
“The month of December 2022 saw the highest issuance at Rs 1,24,073 crore (14.9%) followed by March 2023 at Rs 1,16,364 crore (14%),” the statement read.
No less than 393 new transmitters entered the market in 2022-23, compared to 381 last year.
The government bond market saw a drop of almost 30% with 32 issues yielding Rs 7,444 crore compared to 27 issues yielding Rs 10,710 crore last year. The biggest problem came from Creditaccess Grameen raising Rs 500 crore.
In addition, Indian companies also raised Rs 2.22 lakh crore through overseas borrowing (including BCE), down 42% from Rs 3.86 lakh crore in 2021-22.
Outlook for 2023-24
Haldea said corporate bond issuance is expected to slow given recent tax changes in debt mutual funds which are big investors in this space.
Jyoti Prakash Gadia, Managing Director of Resurgent India, said: “The investment cycle is improving with emerging potential in infrastructure development and green climate change finance. Acquisition of resources for on-lending by banks/financial institutions specifically for identified emerging sectors is a prerequisite at this stage to exploit opportunities in these sectors.”
He added that the recent change in debt fund tax rules could dampen short-term sentiments.
Read all the latest business news, tax news and stock market updates here