Funds raised by listed firms via bonds, rights issues see double digit growth in FY21
Premium- Amount raised though bond issuances rose by 13.5% to Rs7.82 lakh crore in FY21 when compared to Rs6.89 lakh crore in the previous fiscal
Funds raised by listed Indian companies through bonds have increased in FY 21 as the covid-19 pandemic forced corporate entities to borrow money from investors to deal with the adverse impacts of Covid-19 pandemic induced economic slowdown.
According to a press release issued by the Ministry of Finance, amount raised though bond issuances rose by 13.5% to ₹7,82,427.39 crore in FY 21 when compared to ₹6,89,686.19 crore in the previous fiscal. The number of bond issuances also increased by 10% to 2003 times during the recently concluded fiscal.
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Funds raised by companies through initial public offering ( IPO) and Follow-on public offer (FPO) rose significantly by 115% to ₹46029.71 crore while the same though rights issues also jumped by 15% to ₹64058.61 crore during the fiscal year. The union government has been urging big companies to borrow funds from the bond markets ease pressure on the banks and create a vibrant corporate bond market in the coming years.
“Despite the uncertainty prevailing in FY 2020-21 owing to Covid-19 pandemic, fund raising in FY 2020-21 was better than that in FY 2019-20 for both Public Issues and Rights Issues. During FY 2020-21, Rs. 46,029.71 crore and Rs. 64,058.61 crore were raised through Public Issues and Rights Issue respectively, as against Rs. 21,382.35 crore and Rs. 55,669.79 crore raised last year. This is an increase of 115% and 15% respectively in FY 2020-21 as compared to last year," the union government said in a statement.
Listed corporate entities and financial institutions resorted to raising funds through bonds and rights issuances in the first quarter of the FY 21 as businesses came to a halt due to the strict lockdown imposed by the union government to contain the spread of Covid-19 pandemic.
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