Cos raise Rs 46K cr in Jan via debt placement

India Inc raised about Rs 46,000 crore through private placement of corporate debt bonds in January, taking the total to a staggering Rs 5.25 lakh crore during 10 months of the current fiscal.
The funds have been raised for business expansion, to repay loans and meet working capital requirements.
In debt private placement, firms issue debt securities or bonds to institutional investors to raise capital.
According to the data available with the Securities and Exchange Board of India (Sebi), companies garnered Rs 45,957 crore in January this year, compared to Rs 59,587 crore in the preceding month.
With the latest mobilisation, the total fund raising through private placement of debt securities reached Rs 5.2 lakh crore in the current financial year (April-January). In the previous fiscal (2015-16), capital raked in through the route stood at Rs 4.58 lakh crore.

In terms of numbers, 183 issues were made in last month compared with 297 in December.

Bajaj Capital Senior VP and Head Investment Analytics, Alok Agarwala attributed the high inflow in the current fiscal to volatile and weak sentiments in equity markets.
"Volatile and weak sentiments in equity markets encouraged companies to raise capital through private and public bond issues instead of equity issues. Also, cost of raising debt was lower in 2016 as interest rates fell.
"At the same time, there were various regulatory initiatives for deepening Indian bond markets such as banks being allowed to issue Additional Tier 1 Bonds, to meet their capital requirement, investment limit for foreign portfolio investors being increased and the withholding tax rate being reduced from 20 per cent to 5 per cent," he said.