Indian companies mobilised Rs 5.06 lakh crore through the equity and debt routes during April-November 2022, a drop of 8.5 per cent from the year-ago period, the Economic Survey 2022-23 said on Tuesday.
Fund mobilisation through debt contributed a lion’s share to the overall fund-raising during the period under review.
Out of the cumulative Rs 5.06 lakh crore garnered in FY23 (till November 2022), funds totalling Rs 3.92 lakh crore were mopped up from the debt market and Rs 1.14 crore came in through the equity route, as per the data compiled in the survey.
In comparison, firms had raised Rs 5.53 lakh crore, including Rs 3.71 lakh crore through debt and Rs 1.81 lakh crore through equity, which comprised Rs 89,166 crore from initial public offerings (IPOs), during April-November 2021.
According to the survey, overall, India’s capital market had a good year in FY23 though global macroeconomic and financial market developments exercised some influence.
“Global macroeconomic uncertainty, unprecedented inflation, monetary policy tightening, volatile markets, etc., resulted in hurting investor sentiments, leading to a downbeat performance of global capital markets in FY23,” it added.
Within the equity segment, funds mostly came from preferential issue of equity shares (Rs 54,414 crore), which is one of the fastest mechanisms for companies to rake in funds, during the period under review. This was way higher than the Rs 43,000 crore garnered through the route in April-November 2021.
This was followed by the IPO route, which helped 104 companies to raise Rs 48,095 crore during the period under review as compared to 76 firms that collected Rs 89,166 crore in the year-ago period.
Apart from preferential issue of shares and IPOs, funds were also collected through rights issues and qualified institutional placements (QIPs).
“Compared to FY22, the number of firms opting to list on the bourses increased by 37 per cent, though the amount raised declined to almost half of what was raised in the last year,” the survey noted. Although the year so far has been lacklustre in terms of fund mobilisation through IPOs, the number of SMEs coming out with public offerings has been quite encouraging.
Compared to FY22 (until November 2021), this year, not only did the number of SMEs coming with IPOs almost double, but the total funds raised by them were almost three times the amount raised by them in the same period last year.
Further, the year also witnessed the largest IPO ever in the history of India. In May 2022, the central government diluted its stake in the Life Insurance Corporation (LIC) of India and listed it on the stock exchanges, thereby making it the largest IPO ever in India and the sixth biggest IPO globally of 2022.
Moreover, listing of LIC accounted for more than a third of resources mobilised in the primary equity market until November 2022. Of the total Rs 3.92 lakh crore raised through Indian debt markets in FY23, Rs 3.85 lakh crore came from private placement and Rs 6,624 crore was through public issuance.
However, the underactivity in public debt issuances was more than compensated by private debt placements.
The number of private debt placements increased by 11 per cent from 851 to 945, while resources mobilised increased by 6 per cent in April-November 2022 to Rs 3.85 lakh crore as compared to Rs 3.62 lakh crore in the corresponding period in the year before, the survey noted.
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