Indian firms mopped up Rs 2.81 lakh crore from the markets during April-December period of the ongoing fiscal, with debt emerging as the most preferred route to garner funds for business needs, says the Economic Survey 2014-15. The trends remained sluggish in the primary stock market where the companies raise funds through the sale of shares via instruments like IPOs and FPOs despite a bullish equity market.
It has been private placement of corporate bonds that was used the most to meet funding requirements of businesses during April-December period of the current fiscal (2014-15). According to the Survey tabled in Parliament today, Indian firms mobilised a total of Rs 2,80,885 crore from the primary markets during April-December period of the current fiscal, higher than Rs 2,27,398 crore garnered in the year-ago period.
In the primary market, funds were raised through equity (IPOs and rights issue) as well as debt segments. Of the total funds raised, a large chunk of this amount or Rs 2,69,245 crore from private placement of corporate bonds, Rs 7,348 crore from other debt insruments and a mere Rs 4,292 crore was raked in through equity markets. Most of these funds were raised for expansion of business plans and to support working capital requirements.
“Private placements of corporate bonds account for the lion’s share,” according to the Survey. Despite a rally in the stock market, most of the funds were garnered through debt route. The BSE benchmark Sensex surged 27 per cent during the period under review.