The fundraising activity was dominated by Reliance Industries’ mega ₹53,124-crore rights issue
Despite pandemic-led disruptions, India Inc was able to raise funds in capital markets in the first half of the year. Total ₹1.04 trillion was raised in capital markets in the January to June period, data from Prime database shows. This compares to ₹81,052.72 crore in first six months of 2019 and ₹45,233.41 crore in July-December last year.
The fundraising activity was dominated by Reliance Industries’ mega ₹53,124.20 crore rights issue, launched in May which was oversubscribed 1.6 times. Other companies that launched rights issue this year are Piramal Enterprises Ltd ( ₹3,630.85 crore), Bajaj Electricals Ltd ( ₹349.99 crore) and Brooks Laboratories Ltd ( ₹15.33 crore).
According to analysts, markets regulator Securities and Exchange Board of India (Sebi) may have helped companies to raise funds through rights issues. In April this year, Sebi granted a one-time relaxation in its primary market fund-raising norms to make it easier for companies to raise capital amid the Covid-19 pandemic. It has extended its period of approval for initial public offerings (IPOs) and rights issues by six months. This will be applicable to companies where Sebi’s approvals have expired or are due to expire between 1 March and 30 September.
“Companies are raising additional capital through rights issues not to spruce up its balance sheet but also may be to repay debt in this crisis time when banks and other lenders have increasingly become risk aversive. We may see more rights issue coming up in this fiscal," said an analyst who didn’t want to be identified.
Data showed that besides ₹57,520.17 crore raised via rights issue in H1 of 2020, ₹10,419.36 crore was through initial public offering (IPOs), ₹8,282.88 crore through offer-for-share (OFS) and ₹28,573.14 crore via qualified institutional placement (QIP). IPO of SBI Cards & Payment Services Limited (SBI Cards), a subsidiary of Sate Bank of India (SBI), which raised ₹10,354.77 crore, was the biggest listing of the year so far. In the SME IPO segment, ₹24.21 crore was raised in first half of 2020.