Fund mobilisation through corporate bonds via the private placement route hit an all-time high of ₹7,77,473 crore through 637 issuances in 2020, a rise of 10% year-on-year, according to report
Fund mobilisation through corporate bonds via the private placement route hit an all-time high of ₹7,77,473 crore through 637 issuances in 2020, a rise of 10% year-on-year, according to report.
Such issues had mobilised ₹7,09,979 crore in 2019, according to data collatated by PRIME Database.
As against this, in 2001, debt raised through such route stood at a low ₹50,019 crore and for the first such money raising had crossed the ₹1-lakh crore mark in 2007 when companies raised ₹1,05,782 crore, it said in the report.
Since then, it has been on a steady climb crossing ₹2 lakh crore in 2010, ₹3 lakh crore in 2012, ₹5 lakh crore mark in 2015 and ₹7 lakh in 2017 and then dipping to ₹5,68,903 crore in 2018, and again climbing back to over ₹7,09,979 crore in 2019, the report added.
The largest mobilisation through private placements of debt during the year was by HDFC at ₹57,813 crore, followed by REC at ₹53,946 crore, NHAI at ₹53,463 crore, PFC ( ₹50,966 crore), and Nabard ( ₹50,734 crore), according to the report.
PRIME Database Managing Director Pranav Haldea said the massive spike was due to record low interest rates, surplus liquidity and introduction of many liquidity windows by the Reserve Bank of India.
"The amount mobilised in 2020 was an increase of 10% over the ₹7.10 lakh crore in 2019, despite 2020 being the pandemic year," Haldea said.
He added that the highest mobilisation in 2020 was done by the financial institutions and banks at ₹3,47,120 crore, up from ₹3,37,468 crore in 2019, representing an increase of 3%.
Similarly, corporates also issued a record amount of debt, up by 18% to ₹2,94,171 crore as compared with ₹2,49,335 crore in 2019. The amount mobilised by public sector undertakings (PSUs) also increased 13% to ₹1,33,793 crore over 2019, it said.
Government organisations and government financial institutions together mobilised 53% of the total debt, lower than 58% in 2019. Among government organisations, national financial institutions and banks led with a 67% share, followed by 32% by PSUs, the report said.
While 24 national financial institutions and banks and their subsidiaries raised ₹2,78,924 crore or 36% of the total, two state financial institutions raised ₹2,040 crore.
Twenty-one central PSUs mopped up ₹1,33,793 crore or 17% of the total, while two state PSUs mobilised ₹350 crore totalling ₹4,15,107 crore or 53% of the pie.
Eight private sector banks and financial institutions have mopped up ₹68,196 crore, while 260 non-banking financial companies (NBFCs) mopped up ₹1,57,162 crore or 20% of the total.
Ten-year tenor got the maximum amount of money at ₹2.86 lakh crore or 37% of the total, followed by 3-5 year bucket at ₹2.41 lakh crore or 31%.
As much as 43% or ₹3.33 lakh crore of the total was in the under-7% coupon and 36% of the total amount was in the 7-8% coupon.
This was in contrast to 2019, when just 6% of the issues was in below 7% coupon, 26% of the issue amount was in 7-8% coupon and 41% was in the 8-9% coupon range.
Significantly, as much as 78% of the issues or ₹5.90 lakh crore of the overall amount were AAA-rated.
Haldea expects a dip in issuances in 2021 on account of easing of some of the liquidity measures and higher funding costs.