Indian Companies Raise ₹9.41 Lakh Crore via Private Bonds

Indian companies favored the bond market as their primary fundraising avenue in the fiscal year 2023-24, despite the stock market witnessing unprecedented highs. The total mobilization of funds through privately placed corporate bonds reached a new peak of Rs 9.77 lakh crore, marking a 15% increase from the previous year's record of Rs 8.52 lakh crore.

According to bankers, companies opted for private bond placement due to its cost-efficiency and speed in raising capital, which is comparatively cheaper than equity markets. Equity fundraising, including initial public offerings (fresh issues only), qualified institutional placements (QIPs), rights issues, and investment trusts, amounted to Rs 1.26 lakh crore in FY24—the second-highest after FY21.

QIPs accounted for Rs 66,806 crore of this amount. It's noteworthy that the peak for QIP fundraising was in FY21, with companies raising Rs 78,045 crore. However, FY23 witnessed a six-year low in equity fundraising. In FY24, a total of 76 companies collectively raised Rs 61,915 crore, with fresh issues contributing Rs 28,818 crore, while the remaining amount was generated through offers for sale by existing shareholders.