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Indian corporations are on a deleveraging spree.
The CEO of a large bank says between the last financial year and the first five months of the current year, corporate India has cut its debt burden by at least Rs 2 trillion. A large portion of this is done by refineries, steel makers, fertiliser producers and those companies that produce mining and mineral products, and textiles. They are replacing high-cost debt with cheap money, raised from the market, and sale of assets.
In the financial year 2021, corporations raised Rs 14.87 trillion from the market through bonds — 40 per cent higher than what they had raised in the previous year. Money raised through equity was Rs 5.91 trillion in 2021. To be sure, not the entire chunk goes to the companies since part of equity, raised through initial public offers and follow-on offers, is an “offer for sale” through which promoters and investors in listed companies reduce their holdings. Bot
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