Lifted by a wave of liquidity in a rebounding economy, India Inc raised ₹7.34-lakh crore through rupee bonds in FY21, up 9 per cent over the previous fiscal year despite the pandemic. Corporates had raised ₹6.75-lakh crore in FY20.
The biggest fund-raisers during the period were National Bank For Agriculture and Rural Development (₹67,865 crore), Housing Development Finance Corporation Ltd (₹49,843 crore), National Highways Authority of India (₹45,802.6 crore), Rural Electrification Corporation (₹45,193.2 crore) and Power Finance Corporation (₹40,967.6 crore).
“From the debt capital markets perspective, FY21 has been a good year as it started with a healthy volume and saw a growth in issuances despite the lockdown and the pandemic. As there been enough liquidity in the market, in spite of unusually heavy borrowing by the Union and State governments, the growth in corporate bond issuances is a healthy sign,” said Ajay Manglunia, Managing Director and Head of Institutional Fixed Income at JM Financial.
“We have seen a lot of new names and first time issuers entering the market. Yields on bonds issuances have also become more affordable and economical for corporates,” he added.
Highest in April
While April 2020 recorded the highest fund-raise of ₹79,703 crore (up 122 per cent from FY20), followed by May (up 58 per cent) and March 2021 (up 44 per cent), the biggest fall of 53 per cent was recorded in February 2021 followed by January 2021 (down 31 per cent).
“The huge liquidity created by the central bank has ensured more than adequate supply of funds in the market. More importantly, the economy is in sharp rebound and demand is robust. Segments such as cement, metals, construction-related materials and automobiles are witnessing sustained improvement is demand which, in turn, is triggering capex needs of firms. This is pushing up demand for funds via bond issues,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
According to Vijayakumar, the rising trend is likely to continue through this fiscal. JM Financial’s Manglunia agreed, expecting a 10-15 per cent growth.