Indian firms raise Rs 4.57 trn via debt private placement in Apr-Jan FY19

Indian companies raised Rs 4.57 trillion through private placement of corporate bonds during the first 10 months of the current fiscal to meet business needs.

Going ahead, the debt market is expected to see further impetus on Sebi's move asking large firms to manage a fourth of their long-term funds from the bond market, Mukund Ranganathan, executive director at Motilal Oswal Investment Banking, said.

Firms raked in Rs 4,56,962 crore during the April-January period of 2018-19 via private placement of corporate bonds, compared with Rs 4,87,764 crore garnered in the corresponding period last fiscal, according to the latest data available with the Securities and Exchange Board of India (Sebi).

In the full financial year 2017-18, companies had raised Rs 6 trillion through the route.

These funds have been raised mainly for expansion of business plans and to support working capital requirements.

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

In terms of numbers, funds were raised through 1,955 issuance in the first 10 months of the current fiscal as compared with 2,200 in the year-ago period.

"The issuances by financial institutions to fund their lending requirement in addition to other corporates have been the mainstay of the debt market, and this year was no exception.

"Going forward, we see the debt market getting a further impetus after Sebi coming out with guidelines that required large listed companies to raise at least 25 per cent of their long-term borrowings through corporate bonds, which is to come into force from April 1, 2019," Ranganathan added.