India Inc taps Rs 2.54 lakh cr via private placements of debt

Indian companies have raised a whopping Rs 2.54 lakh crore (Rs 2.54 trillion) through private placement of debt securities or bonds in last fiscal -- the highest level in nine years, says a report.

According to a report by Prime Database, ". . . fiscal 2011-12 witnessed a mobilisation through corporate bonds on private placement basis of Rs 2,51,437 crore (Rs 2,514.37 billion) , significantly higher than the preceding year's mobilisation of Rs 1,92,225 crore (Rs 1,922.25 billion)."

This marks an increase of 31 per cent in the total size of such funds from the levels seen in 2010-11.

The amount was mobilised by a total of 164 institutions and corporates, the report added.

In debt private placements, the companies issue debt securities or bonds to institutional investors to raise capital.

In 2002-03, Indian companies had garnered Rs 48,424 crore (Rs 484.24 billion) through private placement of debt.

In 2008-09 and 2009-10, they raked in Rs 1,74,327 crore (Rs 1,743.27 billion) and Rs 1,89,490 crore (Rs 1,894.90 billion, respectively.

The funds raised by all-India financial institutions and banks grew by 38 per cent to Rs 1,60,369 crore in the fiscal year 2011-12.

At the same time, the funds raised by the private sector slipped by three per cent to Rs 58,134

crore in this period.

Prime Database's Prithvi Haldea said that the fund mobilisation by PSUs, however, increased from Rs 12,450 crore (Rs 124.5 billion) to Rs 27,176 crore (Rs 271.76 billion).

The funds raised by state-level undertakings was also robust.

"An increase of 111 per cent was also recorded by the State Level Undertakings to Rs 4,184 crore (Rs 41.84 billion) from Rs 1,981 crore (Rs 19.81 billion) in the previous year.

Raising by State Financial Institutions increased by 10 per cent from Rs 1,425 crore (Rs 14.25 billion) to Rs 1,575 crore (Rs 15.75 billion)," the report noted.

All the government organisations and financial institutions together have accounted for 78 per cent of total funds raised during this year, up from 69 per cent a year ago.

In terms of sectors, financial services segment dominated the market with a 77 per cent share of total funds, followed by power sector with 9 per cent share.