India Inc mops up Rs64,250 crore in private debt in Q1, up 29%
MDT/PTI 11 September 2012

According to a report by Prime Database, during the first quarter about 86 institutions and corporates raised funding of Rs64250 crore from private placement market

Mumbai: As bank credit remained costly given the high interest rate, corporates turned to private placement market to mobilise funds which jumped 29% in the first quarter to Rs64,250 crore, while bank credit grew just about 20% to the industry as a whole, driven largely by the oil sector, reports PTI.


"The fund-raising in the April-June period touched Rs64,250 crore, an increase of 29% or Rs49,859 crore mobilised in the same period previous year," says a report by Prime Database.


This amount was mobilised by 86 institutions and corporates, according to a report by Prime Database which claims to operate the only database on debt private placements in the country, according to the agency chairman and managing director Prithvi Haldea.


The highest mobilisation was by PFC (Rs8,398 crore), followed by HDFC (Rs4,790 crore), Hindalco (Rs4,500 crore) and Nabard (Rs4,379 crore), he said adding his agency tracks only those deals, which have a tenor and put/call option of over a year.


According to the data released by Prime Database, on an industry-wise basis, the financial services sector continued to dominate the private debt market, collectively raising Rs41,816 crore or 65% of the total amount, followed by the power sector with a 9% share at Rs5,474 crore.


Against this, according to banks, during the period, non-food credit grew a poor 19.5%, down from 23.8% a year ago. Had it not been for a good 400 basis points increase farm credit, to 16.8% from 12.8% a year go, growth would have even lower.


During Q1, the bank credit to the oil sector nearly doubled to 25.2%, up from 14.2%, taking the overall credit flow to the industrial sector up by 20.3%, show banking data.


As per the Prime report, the biggest mop-up was again carried out by financial institutions/banks which together raised Rs32,980 crore, a tad over 50% of the entire mop-up. But this was down from the comparable period last year when it stood at Rs35,299 crore, representing a decline of 7%, says Haldea.

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