India Inc.’s bond with debt market weakens in 2018
Proceeds from bond sales declined by 30% in 2018 to $47.2 billion after surging to a record $67.4 billion a year before
Mumbai: Primary bond offerings from Indian issuers fell to a decadal low in 2018 with several Indian corporates shelving fundraising plans amid rising US interest rates and an uncertain investment environment at home. According to data compiled by Thomson Reuters, proceeds from bond sales declined by 30% in 2018 to $47.2 billion after surging to a record $67.4 billion a year before.
The Tata group topped Indian conglomerates with Tata Capital Financial Services raising $3.1 billion in non-convertible debentures—the biggest bond offering from an Indian issuer in 2018.
Another top seller was ABJA Investment, a wholly-owned subsidiary of Tata Steel Ltd, which raised $1.3 billion from its dollar dual-tranche bond offering.
Indian companies tapping the offshore dollar-denominated bond markets raised $6.3 billion, down 51.7% from a year ago as the number of issuances more than halved.
Rupee-denominated bond proceeds clocked ₹3 trillion in 2018, down 19.9%, making it the lowest since 2015.
In 2017, rupee-denominated bond issuances witnessed total fundraising of ₹3.7 trillion, a record.
Among sectors, the financial services industry accounted for 84.7% of the market share at $40 billion, registering an 11.9% decline in proceeds compared to a year before at $45.4 billion. In the rupee bond segment, the financial sector accounted for 81.4% of the market with ₹2.4 trillion, down 6.5%.
Issuance from the government and government agencies reached $2.3 billion, down 18.5% in proceeds from 2017, and accounted for 4.8% of the market share. The energy and power sectors followed close behind and rounded out the top three sectors with a 4% market share.
Underwriting fees from primary bond offerings by Indian issuers totaled $130.5 million, down 40% from 2017, according to the report.
Axis Bank led the fee rankings for India primary bond issuance with $25.4 million in estimated fee revenue, down 33.7% from a year ago, accounting for 19.4% of the wallet share in 2018. The bank advised bond sales worth $10.7 billion in 2018.
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