India Inc's private placement of debt increases

India Inc raised Rs 1.64 lakh crore through private placement of debt in the first nine months of the current financial year, five per cent higher than in the year-ago period. According to research agency Prime, banks and financial institutions were at the forefront, in terms of tapping funds through private placement of bonds.

Private placement pertains to the sale of securities to a relatively small number of investors, usually select and large, to raise capital.

Banks and financial institutions saw an increase of 17 per cent in debt placement. “The biggest mobilisation was by the category of all-India financial institutions/banks at Rs 1.1 lakh crore,” Prime said in a release. This compared to Rs 93,819 crore in the corresponding period of the previous year, it added.

While mobilisation of funds through private debt placement by public sector undertakings rose significantly, the private sector saw a downward trend. Prime chairman and managing director Prithvi Haldea said, “Mobilisation by public sector units rose 33 per cent to Rs 15,768 crore, compared with Rs 11,845 crore in the corresponding period of the previous year.

The private sector saw a 27 per cent fall in mobilisation at Rs 35,422 crore, compared with Rs 48,617 crore in the year-ago period.”

Power Finance Corporation, Housing Development Finance Corporation, Rural Electrification Corporation, Infrastructure Development Finance Company and Air India had mobilised funds through private placement of bonds.