Debt back in vogue

Debt back in vogue
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First Published: Sat, Jan 03 2009. 09 13 AM IST
Updated: Tue, Jan 06 2009. 02 22 PM IST
New Delhi: After hitting the 21,000 mark in January, the Indian markets plummeted to 9000 levels in December. With the reversal in market fortunes, Indian companies also saw their sources of capital drying up and turned to the debt markets. According to Prime Database managing director Prithvi Haldea, 54 companies issued notices inviting deposits from the public in 2008, against only 11 companies in 2007.
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This increased activity in the debt market is likely to sustain till a fresh bull run begins on Dalal Street. But analysts believe the capital markets may only toughen in the coming months. Experts however say if after the general elections, the newly formed government clears long pending reforms, that may just give the economy a much needed push.
In 2008, IPO volumes fell by 51% to around Rs19,360 crore (till 10 December). This was against nearly Rs40,000 crore that companies raised via IPOs in 2007 as per a study by NexGen Capitals. If Reliance Power’s 12,000 crore IPO is excluded, the decline is even sharper.
Haldea holds that FIIs will stay away from the Indian markets for now. However, companies may be able to raise money by issuing corporate bonds, a source of fund that has not been much in use till now.
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First Published: Sat, Jan 03 2009. 09 13 AM IST
More Topics: Video story | Markets | Debt | IPO | FIIs |