Fundraising through bond placement hit all-time high at Rs 9.98 lakh crore in FY24

Fund mobilisation through corporate bonds on private placement basis reached an all-time high of Rs 9.98 lakh crore in 2023-24, marking a surge of 17 per cent from the preceding fiscal, according to a release by primedatabase.Com on Thursday.

Prime Database Group Managing Director Pranav Haldea attributed the upswing to a surge in credit demand fuelled by strong economic growth. This came despite changes in taxation relating to debt mutual funds and expectations of lower borrowing costs.

The highest fund mobilisation in 2023-24 (FY24) came from the All-India Financial Institutions/Banks category at Rs 4.68 lakh crore. This was in comparison to Rs 4.33 lakh crore raised in 2022-23, representing an increase of 8 per cent.

The private sector (excluding banks or financial institutions) witnessed a 44 per cent jump, mobilising Rs 4.96 lakh crore compared to Rs 3.44 lakh crore in 2022-23.
Government entities played a key role, collectively mobilising 39 per cent of the total amount, slightly lower than the 41 per cent registered in 2022-23.

Among government entities, All-India Financial Institutions/Banks led with an 91 per cent share, followed by a 8 per cent share by public sector undertakings (PSUs).
NABARD emerged as the frontrunner in fund mobilisation, garnering Rs 65,393 crore followed by REC (Rs 52,140 crore), HDFC (Rs 46,062 crore), PFC (Rs 45,130) and SIDBI (Rs 38,600 crore). The top 5 issuers of 2023-24 raised Rs 2.47 lakh crore, constituting 29 per cent of the total amount.

As per the release, fund mobilisation through corporate bonds on private placement basis stood at Rs 9.98 lakh crore in FY24 as compared to Rs 8.52 lakh crore in the preceding fiscal. This was mobilised by 976 institutions and corporates.

Also, public bonds market witnessed a remarkable growth in FY24 with 48 issues raising Rs 20,787 crore in comparison to 32 issues mobilising Rs 7,444 crore in FY23. The largest issue was from Power Finance Corp that raised Rs 2,824 crore.

In addition, Indian companies also raised Rs 3.79 lakh crore through overseas borrowing (including ECBs) in FY24, marking a jump of 71 per cent from Rs 2.22 lakh crore garnered in the preceding fiscal year.