Fund mobilisation through privately placed corporate bonds in India reached a record high of Rs9.77 lakh crore in FY24, a 15% increase compared to the previous year. Indian companies preferred this method as it is cost-efficient and cheaper than equities. Fundraising through the equity route totaled Rs 1.26 lakh crore, with QIPs contributing significantly. This article provides insights into the fundraising activities in the Indian market.
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Liquid funds, commonly used by corporates to park short-term cash, have experienced significant outflows due to the Reserve Bank of India’s measures to tighten liquidity conditions and cyclical outflows at the end of the half-year. Data from the Association of Mutual Funds in India (AMFI) shows that liquid funds witnessed net outflows of ₹74,176 crore in September, the highest among debt oriented schemes. Bond yields have risen sharply since August as the RBI has drained excess liquidity from the banking system.
During the first-half of FY24, 20 companies have together raised ₹18,500 crore through QIPs, while another dozen have already announced plans to raise up to ₹25,000 crore through this route. According to bankers, most of the QIP funds will be used for new projects, modernisation, infrastructure development, and purchase of capital goods, while lenders would utilize the proceeds for long-term capital requirements.
