Corporate debt funds rise 3.2 per cent during April-Nov

Mumbai :Indian companies raised Rs 2.55 lakh crore from corporate debt issuances during the first eight months of the current fiscal, an increase of 3.2 per cent from the same period a year-ago, says a report.

A total of Rs 2.47 lakh crore were mopped up by corporates through debt securities during April-November period of 2014-15.

“Overall growth in the corporate debt market has been subdued on a cumulative basis with an increase of 3.2 per cent being witnessed between April-November 2015 over comparable period of last year,” Care Ratings said in its latest report.

As per the report, financial services constituted 74 per cent of total debt raised while manufacturing had share of just 5.8 per cent.

“This has been a trend of late where most of the debt raised has been by the financial services segment for which funds are the raw material that is used for on-lending,” the rating agency said.

Meanwhile, infrastructure, including mining, power, telecom, real estate and industrial construction accounted for 17 per cent of the total debt raised in the market.

Noting that debt raised in the market is typically used for capital investment, the report said “the overall picture for capital formation appears to be subdued”.

On trends in equity markets, Care found that the equity raised in the first eight months of the year was more than double of that in FY15.

Equities worth Rs 81,830 crore was raised in April-November period compared with Rs 38,525 crore garnered in whole of 2014-15.

The financial sector dominated again with a share of 54 per cent of total equities, the report said.

Within the non-financial sector, mining, electricity, services, and construction accounted for 28 per cent.

“Hence once again there was concentration in certain pockets of the economy when it came to raising equity,” the report said.