India Inc mops up Rs 3 lakh crore in H1 FY16, prefers debt route

Indian companies have garnered close to Rs 3 lakh crore from the markets in the first half of the ongoing fiscal with debt market emerging as the most preferred route for their corporate needs.

An analysis of funds raised through various channels showed that companies have mopped up fresh capital totalling Rs 2,90,470 crore through equity and debt in the first half of the current fiscal.

A large chunk of this, more than Rs 2.44 lakh crore came from the debt market, while Rs 46,197 crore were mobilised through equity.

The funds were raised for business expansion plans to support working capital requirements and retire debt.

In the equity segment, money was raised through the preferential route (Rs 20,874 crore) followed by qualified institutional placements (Rs 12,658 crore), rights issue (Rs 7,760 crore) and initial public offers (Rs 4,904 crore).

Whereas in the debt market, the companies bagged over Rs 2.43 lakh crore through debt placement, while public issuance of debt securities accounted for just Rs 1,553 crore.

Amid a volatile equity market, corporate bonds have become popular among the investors as it offers low risk and higher income than shares, market experts said.

Besides, companies have been opting for corporate bonds route to mop-up fresh capital as they are finding the instrument more cheaper than banks, they added.

In the previous fiscal, firms had raked in a total of Rs 4.80 lakh crore from equity and debt markets compared with Rs 3.92 lakh crore in 2013-14.