Debt private placements down 55% in June quarter

Lower fund raising by banks and financial institutions contributed to the decline, according to first quarter statistics from PRIME Database

Funds raised through private placement of debt instruments in the quarter ended June were Rs 43,147 crore, less than half the Rs 96,186 crore in the corresponding period last year, according to data released by PRIME Database.

Pranav Haldea, managing director of PRIME, said this was largely due to subdued fund-raising by financial institutions and banks. “Mobilisation by all-India financial institutions/ banks witnessed a huge decline — it fell 72 per cent to Rs 13,058 crore from Rs 47,272 crore in the corresponding period of the previous year. Mobilisation by state financial institutions decreased 92 per cent to Rs 98 crore from Rs 1,251 crore,” he said.

During the June quarter, the private sector mobilised Rs 28,991 crore, compared with Rs 38,161 crore in the year-ago period. The share of government entities in private placements also saw a decline; these accounted for only 15 per cent of the capital raised, against 47 per cent in the corresponding period last year.

Companies that raised substantial amounts through this route included HDFC, EXIM Bank and IOT Utkal, raising Rs 3,000-4,500 crore each. IDFC and Reliance Jio raised Rs 2,730 crore and Rs 2,500 crore, respectively.

Against Rs 8,568 crore in the June quarter of 2013-14, public sector undertakings raised no funds through this route in the quarter ended June this year.