Fund raising by corporates up 64% to Rs 1.1 trillion in August

Companies garnered more than Rs 1 trillion from the capital markets in August, a surge of 64 per cent from the preceding month

Companies garnered more than Rs 1 lakh crore from the capital markets in August, a surge of 64 per cent from the preceding month, with private placement of debt instruments emerging as the most preferred route for financing business needs.

The funds have been mopped-up mainly for business expansion plans, loan repayments and working capital requirements.

According to data available with the markets regulator Sebi, companies raised a total of Rs 1.1 lakh crore in August as compared to Rs 66,915 crore in July 2020 by way of issuing equity and debt securities.

Out of the cumulative Rs 1.1 lakh crore garnered in August, Rs 58,419 crore was mopped up from private placement of debt securities and Rs 45,471 crore through private placement of equity, which include qualified institutional placement (QIP) and preferential allotment routes.

A total of Rs 42,725 crore and Rs 2,746 crore were raised through QIP and issuance of shares on preferential allotment basis, respectively.

In comparison, corporates had mobilised just Rs 2,882 crore from private placement of equities in July.

When it comes to raising funds through public issuance in August, Rs 6,096 crore was raised through rights issue and Rs 11.5 crore by SMEs' initial share-sales.

There was no public issue of corporate bonds in the month of August 2020. However, during July 2020, there was one public issue of corporate bonds amounting to Rs 160 crore, the data showed.