Cos raise Rs 70k cr via mkts in Apr-Nov FY'18;equity preferred

Indian firms mopped up over Rs 70,000 crore through primary markets during April-November of the current fiscal, a surge of 45 per cent from the year- ago period, says the Economic Survey 2017-18.
A large chunk of these funds were raised through equity route, to meet business needs, as compared to debt.
"During the year (current fiscal) April-November, 134 companies accessed primary market and raised Rs 70,316 crore compared to Rs 48,325 crore raised through 80 issues during the corresponding period of 2016-17," according to the Survey tabled in Parliament today.
Of the total, firms raked in Rs 66,420 crore through equity and the remaining Rs 3,896 crore via the debt route.

Within the equity segment, as many as 122 public issues (initial share-sales and follow-on public offers) raised Rs 66,641 crore and 12 firms mobilised Rs 3,675 crore via issuance of shares to existing shareholders on rights basis.
The higher fund raising through equities is in line with stock markets hitting record highs this financial year.

Apart from primary markets, funds mobilisation through issuance of corporate bonds (public and private placement) rose rapidly in April-November period of 2017-18, as compared to the year-ago period.
During the period under review, companies raised an amount of Rs 4.23 lakh crore through corporate bonds (public and private placement).

"Private placements continued to dominate the corporate bond market. However, it must be noted that resource mobilised through public and private placement of corporate bonds is not a substitute for bank credit. The maturity period of bonds is much shorter compared to bank credit.
"Also, if banks subscribe to corporate bonds then it may lead to double counting. Hence, one needs to be cautious while comparing such resource mobilisation with bank credit," the Survey noted.