India Inc garners Rs 9.41 trn via corporate bonds

New Delhi: Indian companies garnered Rs9.41 lakh crore through the issuance of bonds on a private placement basis in 2023-24, a surge of 10 per cent from the preceding fiscal amid surge in credit demand.

The 2024-25 fiscal is expected to be very robust as companies will continue to raise capital for capex post-election results.

“In an unprecedented era of economic development aided by pro-business reforms and macroeconomic stability, India is set to become the third largest economy globally by 2027 and will continue to see strong flows. In this backdrop, we expect FY25 to also be a very strong year from a primary capital perspective as companies will continue to look to raise capital for capex post-election results,” said Neha Agarwal, Managing Director & Head of Equity Capital Markets at JM Financial Ltd.

According to data compiled by Prime Database, the amount raised through debt private placement in 2023-24 stood at Rs9.41 lakh crore, up 10 per cent from Rs8.52 lakh crore in 2022-23. This was mobilised by 904 institutions and corporates. In addition, there were 17 debt private placements from real estate investment trusts (REITs) and infrastructure investment trusts (InVITs) collecting Rs14,155 crore.

The funds were mopped up to strengthen balance sheets, retire existing debt and support working capital requirements. In private placement of bonds, firms or trusts issue securities or bonds to institutional investors to raise capital. Market experts believe private placement has become the preferred and cost-efficient route for fund mobilisation compared to other avenues such as initial public offering (IPO), qualified institutional placement (QIP) and bank loans.