MUMBAI: Despite the single biggest issuer HDFC exiting the debt market following its merger in July, bond issuances (mostly in the private placement route) touched an all-time high in FY24 at Rs 9.98 trillion (Rs 9.98 lakh cr), up from Rs 8.52 trillion in the previous fiscal as companies are banking more on the less-cumbersome private debt market for their short to medium term funding needs.
Fiscal 2024 saw an all-time high fund mobilisation via corporate bonds on private placement basis at Rs 9.98 trillion by 975 issuers, more than 17% from FY23, shows the data collated by Primedatabase that provides data on the primary capital market. The data is based on those bonds both listed as well as unlisted, with a tenor and put/call option of above 365 days.
Of the total, public bonds were only Rs 20,787 crore, a rise of 179% more than the year from 48 issues, as against 32 issues raising Rs 7,444 crore in FY23. The largest issue was from Power Finance Corp’s Rs 2,824 crore. In addition, domestic companies also raised Rs 3.79 lakh crore through overseas borrowings (including ECBs), which was up 71% from Rs 2.22 lakh crore in FY23.
According to Pranav Haldea, the managing director of Prime Database group, the record debt numbers are due to the surging credit demand on the back of strong economic growth and as usual, financial institutions led the mobilisation at Rs 4.68 lakh crore, up from Rs 4.34 lakh crore in FY23, representing an increase of 8%. But the private sector also raked in more debt, lapping up 44 % more than in the previous year at Rs 4.96 lakh crore, compared to Rs 3.44 lakh crore in FY23.
In last year, the debt raising stood at Rs 6.74 lakh crore in FY20, `7.54 lakh crore in FY22 and Rs 6.35 lakh crore in FY23. The public sector together mobilised 39% of the total debt, lower than 41% in FY23. Among government entities, banks led with a 91% share followed by a 8% share by other central units.
After HDFC exited from the market after the reverse merger effective July 1, 2023, the public sector developmental lender Nabard led the mobilisation chart in the year with Rs 65,393 crore mop-up, followed by REC at Rs 52,140 crore, HDFC (till June 2023 at Rs 46,062 cr), PFC (Rs 45,130 cr) and Sidbi (Rs 38,600 cr). These top five issuers raised a quarter of the total or Rs 2.47 lakh crore.
The maximum money was raised in the above 10-year maturity bucket (Rs 3.29 lakh crore or 33% of the total), followed by 3-5 years bucket (Rs 2.78 lakh crore or 28% of the total). Coupons or the effective interest paid to investors averaged at 7-7% for as much as 56% of the total amount or Rs 5.56 lakh crore and 16% or Rs 1.63 lakh crore was in the 8-9% range.