State Psus Mobilised 27% Of Privately Placed Debt

State level undertakings have emerged as one of the largest borrowers in the financial markets. With a share of 27 per cent (Rs 1812 crore) of the total debt mobilisation through private placement in the first quarter of fiscal 1998-99, state level undertaking are second only to all India financial banks and institutions at 34 per cent (Rs 2313 crore).

Significantly, these state level undertakings raised resources primarily for infrastructure.

Accroding to a report on private placement sweepstakes by Prime Database, the private sector follows with a share of 20 per cent (Rs 1371 crore), while public sector undertakings bring up the rear with a share of 18 per cent (Rs 1233 crore).

Also, unlike the unprecedented growth during the past three years, the first quarter of 1998-99 witnessed a decline in private placement of debt. An amount of only Rs 6730 crore was mobilised by 48 instututional and corporate organisations through 69 issues. In 1996-97, the mobilisation was Rs 18,391 crore, while 1997-98 saw it rise to a high of Rs 30,983 crore.

The drop is mainly attributable to the lower mobilisation by financial institutions _ down from Rs 12,744 crore in 1997-98 to only Rs 2313 crore in the recent quarter.

The highest mobilisation through private placement of debt during the quarter was made by IDBI (Rs 774 crore), followed by IFCI (Rs 590 crore), Sail (Rs 570 crore), ICICI (Rs 415 crore) and KBJN (Rs 320 crore).

Significantly, according to Prime Database, 80 per cent of the total amount was mopped up ny government organisations. This represented an increase from its 75 per cent share in 1997-98, though a fall from 90 per cent in 1996-97.

From a meagre Rs 311 crore in 1995-96, Rs 2630 crore in 1996-97 and Rs 6726 crore in 1997-98, the recent quarter saw state level undertakings raising a high of Rs 1812 crore.

The major mobilisers were Krishna Jala Bhagya Nigam (Rs 320 crore), MKVDC (Rs 303 crore), RSEBation by the private sector. while Rs 7763 crore was raised by 95 companies during 1997-98, the recent quarter saw this sector raise only Rs 1371 crore.

The financial sectro continued to dominate the market, collectively raising Rs 2594 crore or 38 per cent of the total amount. Power ranked second with a 19 per cent share (Rs 1288 crore), followed by steel (Rs 877 crore) and water resources (Rs 517 crore).