Fundraising via bonds on private placement rises 73% in April-August

Corporates in India raised Rs 3.31 lakh crore through bond issuances on a private placement basis in the first five months of the current fiscal year, an increase of 73 per cent compared to the corresponding period in the previous year. The primary purposes for mobilising these funds were to bolster their balance sheets, retire existing debt, and fulfil working capital requirements, as noted by market experts.

Data compiled by the Securities and Exchange Board of India (SEBI) revealed that between April and August of the ongoing fiscal year, Rs 3.31 lakh crore was raised through the private placement of corporate bonds. This figure represents a significant uptick from the Rs 1.91 lakh crore raised in the first five months of the fiscal year 2022–23.

Several factors contributed to the increase in fund mobilisation through the private placement of corporate bonds. These factors include heightened demand for credit, rising interest rates on bank loans, and the relatively expensive nature of overseas borrowing.

Number of issuances

In terms of the number of issuances, there were 520 private placements during the review period, compared to 508 in the same period of the previous year.

Private placement involves companies issuing securities or bonds to institutional investors rather than conducting a sale in the open market. Online platforms like BSE-BOND and NSE-EBP (Electronic Debt Bidding Platform) facilitate the process of bidding for the private placement of debt securities.

Notably, in the fiscal year 2019-20, companies in India raised a total of Rs 7.55 lakh crore through the issuance of bonds on a private placement basis.

In addition to private placements of corporate bonds, approximately Rs 8,200 crore was raised through public issues of non-convertible debentures during the same review period.

(With PTI Inputs)