Fundraising via bonds on private placement surges 73% to Rs 3.3 lakh crore in Apr-Aug

Corporates garnered Rs 3.31 lakh crore through the issuance of bonds on a private placement basis in the first five months of the ongoing fiscal, a surge of 73 per cent from the year-ago period.

The funds were mopped up to strengthen balance sheets, retire existing debt and support working capital requirements, market experts said.

According to data available with markets regulator Sebi, Rs 3.31 lakh crore was mopped-up through the route during the April-August period of the current fiscal. In comparison, firms raised Rs 1.91 lakh crore in the first five months of 2022-23, data showed.

Market experts attributed several factors to higher fund mobilisation through private placement of corporate bonds such as increase in credit demand, soaring bank loan rates, and expensive overseas borrowing.

In terms of numbers, 520 issuances took place during the period under review as compared to 508 in the year-ago period.In private placements, firms issue securities or bonds to institutional investors instead of a sale in the open market. 

The platforms -- BSE-BOND and NSE-EBP (Electronic Debt Bidding Platform) -- facilitates online bidding for private placement of debt securities. Overall, firms raised Rs 7.55 lakh crore through issuance of bonds on private placement basis in 2019-20.

Apart from private placement of corporate bonds, funds worth about Rs 8,200 crore were raised through public issues of non-convertible debenture during the period under review.

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