India Inc mops up Rs 2.34 trn

Indian corporates and banks raised a whopping sum from domestic and overseas markets in 2006 mirroring the sizzling growth in the domestic GDP.

According to Bloomberg data, a total of Rs 2,34,903 crore was raised via equity and debt issues in domestic and overseas markets, 66 per cent more than it mopped up in 2005.

The country's GDP grew by 9.2 per cent over a year ago in the quarter ended September 2006, forcing an upward revision in forecasts for the full year 2006-07 to over 8 per cent.

Banks were the capital guzzlers in 2006 as credit continued to grow at an unprecedented 30 per cent for third successive year.

Of the Rs 76,200 crore funds raised through bond floats in the domestic market, over Rs 58,000 crore was raised by banks through perpetual and tier II issuances as they sought to boost their capital adequacy to support credit growth. 
 

FUND GUZZLERS
	2005	2006	% chg
(In Rs cr)
Domestic bonds	55,800	76,200	36.56
IPO	9,700	25,100	158.76
(In $ mln)
Depository receipts	4,089	3,447	-15.70
FCCBs	4,006	4,916	22.72
International bonds	1,325	2,937	121.66
International loans	7,701	18,893	145.33
Source: Bloomberg

International bond issuances from India had an identical story. Banks accounted for $2,448 million of the total $2,937 million raised through overseas bond issues.

The highest amount of debt raised from the domestic market was in the third quarter of 2006 at Rs 28,400 crore. The lowest amount of Rs 12,900 crore was raised in the fourth quarter amid rising interest rates.

Foreign currency convertible bond (FCCB) issuances slowed after peaking to $2,640 million in the first quarter of 2006, as a sharp rise in equity prices in India made FCCBs less attractive.

FCCB issues slowed to $1,430 million in the quarter ended June 2006, to $432 million in the third quarter and to $415 million in the fourth quarter.

Funds raised through initial public offers (IPOs) in 2006 was 2.5 times the volume in 2005. A total of Rs 25,100 crore was garnered through domestic equity issues in 2006 against Rs 9,700 crore in 2005.

The money mobilised through depository receipt issues was, however, lower in 2006 at $3,447 million compared with $4,089 million in 2005 as the Securities and Exchange Board of India made it easier to tap the same set of investors through more quicker qualified institutional placements.