Fund mop-up via debt placement falls 23% to Rs 28,000 cr

Indian companies raised close to Rs 28,000 crore in July through private placement of corporate bonds to meet business needs, a slump of 23 per cent from the preceding month.

Market analysts said a positive outlook for equities and availability of capital have helped companies to opt for this window to mop up fresh funds instead of debt route.

According to the data available with Securities and Exchange Board of India (Sebi), companies garnered a total of Rs 27,920 from debt on a private placement basis in July, as compared to Rs 36,125 crore raised in the preceding month.

Firms had raked in Rs 20,692 crore in May and another Rs 84,807 crore in April.

With this, the total fund mobilisation through this route has reached Rs 1.7 lakh crore in first four months (April-July)of the current financial year. In comparison, firms had garnered over Rs 4 lakh crore in the entire last fiscal year (2014-15).

These funds have been raised mainly for expansion of business plans, refinancing of debt and to meet working capital requirements.

In debt private placements, firms issue securities or bonds to institutional investors to raise capital.