Amid the global credit crunch, corporate India's overseas fund raising almost halved to $17.58 billion in fiscal 2008-09 in comparison with 2007-08.
The total funds raised from abroad through various securities such as American Depository Receipts (ADRs), Global Depository Receipts (GDRs), External Commercial Borrowing (ECBs) and Foreign Currency Convertible Bonds (FCCBs) have fallen by 47.66 per cent, according to an analysis by domestic brokerage firm SMC Capitals.
India Inc raised $17.58 billion in 2008-09 while it had mopped up $33.59 billion through these securities in financial year 2007-08.
"This reduced fund raising is already giving unmistakable signs of slow down in the capacity expansion and industrial production by Indian corporate as the fuel for growth engine is dried up," SMC Capitals Equity Head Jagannadham Thunuguntla said.
Besides, India Inc had a tough time in raising funds in the domestic market as the IPO volumes in India have dipped by 50.54 per cent from $8.18 billion in 2007 to $4.05 billion in 2008.
There was only one IPO in the first three months of 2009.
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Similarly, fund raising through private equity has also been dented substantially.
Private equity volumes in India have fallen to $10.59 billion during 2008-09 against $19.03 billion in 2007-08.
The once high profile ADRs and GDRs went out-of-favour in 2008-09 as the total funds raised through these instruments by Indian companies have fallen by a whopping 98.09 per cent. It has come down to $0.05 billion in 2008-09 from $2.63 billion in 2007-08. Even there is a drop of number of ADRs and GDRs from 13 in 2007-08 to 3 in 2008-09.
Even debt form of fund raising from abroad become difficult for Indian firms in 2008 -09. As the total funds raised through ECBs by Indian companies fell by 35.72 per cent from $24.97 billion in 2007-08 to $16.05 billion in 2008-09. There was also a drop of number of ECBs from 557 in 2007-08 to 458 in 2008-09.
The hybrid instrument with the dual advantage of equity and debt has also lost its sheen. Total funds raised through FCCBs by Indian firms witnessed a fall of 75.29 per cent from $5.99 billion in 2007-08 to $1.48 billion. The number of FCCBs dropped from 67 in 2007-08 to 20 in 2008-09.
"In nutshell, the ability of Indian corporate in fund raising through high profile instruments such as ADRs, GDRs, ECBs, FCCBs, IPOs, Private Equity has fallen substantially," the report said.