Corporate bond mop-up on a high

If it took five years (2001-06) for corporate bonds to mobilise Rs 2,79,535 crore through private placements, while they mopped up a record Rs 92,355 crore during the year ended March 31, 2007, a rise of 13 per cent compared with last year's Rs 81,847 crore.

According to Prime Database, which tracks the primary market mobilisations, the reason for the sudden increase is the continuing mobilisation by financial institutions and banks. Their share went up by 13 per cent from Rs 61,614 crore to Rs 69,693 crore.

The other sector which witnessed growth was the private sector whose bond-raising capacity went up by 83 per cent from Rs 7,944 crore to Rs 14, 540 crore. State-owned financial institutions also put up a good show by reporting 97 per cent growth to Rs 1,192 crore from Rs 604 crore in the previous year.

On the other hand, resource mobilisation by public sector undertakings suffered 43 per cent decline at Rs 6,178 crore compared with Rs 10,796 crore in the previous year. State government-owned undertakings also followed suit with 15 per cent decline from Rs 889 crore to Rs 752 crore.

Says Prithvi Haldea of Prime Database: "The financial services sector continues to dominate the market, raising Rs 82,982 crore or 90 per cent of the total amount."

In addition, one-year tenor mobilisation of Rs 92,355 crore was raised through 805 deals of less than one-year tenor bonds by 68 issuers.

Government organisations and financial institutions put together, witnessed a decrease, mobilising 84 per cent of the total amount, down from 90 per cent in the previous year.