Fund rising by Indian listed companies through private placement of debt securities or bonds declined by 23.6 percent to Rs 2.76 lakh crore in FY14 compared to the previous financial year.
Domestic companies have garnered a total of Rs 3.61 lakh crore from debt on a private placement basis during FY14, while the number of issues in FY14 dropped to 1,924 from 2,489 in the previous financial year.
In debt private placements, firms issue debt securities or bonds to institutional investors to raise capital. The fall in fund mobilisation through debt securities could be attributed to a good performance of the equities in the stock market and stability of the rupee compared to a dollar during the reported fiscal. Further, the highest amount of funds of around Rs 41,811.99 crore were mobilised by the companies in April, 2013, followed by Rs 35,213.92 crore in June. Conversely, the amount of Rs 2,088.71 crore was garnered through the private placement route in August, the lowest in the entire financial year 14.
India witnessed significant improvement on macroeconomic front during second half of FY14. The current account deficit (CAD) contracted to $4.2 billion (0.9% of GDP) in Q3 FY14 as compared to $5.2 billion (1.2% of GDP) in Q2 FY14 and $31.9 billion (6.5% of GDP) in Q3 FY13. Further, high FIIs inflows particularly in Q4 FY14 and significant improvement in country CAD and inflation have brought stability in rupee value against the dollar.