Indian companies mop up over ₹9 lakh cr via equity, debt routes in 2021

Indian companies have mopped up further than ₹ 9 lakh crore through equity and debt routes in 2021 to meet their renewed thirst for business expansion in a buoyant stock request brimming with liquidity and helped by recovering macroeconomic pointers after epidemic- destroyed first many months Unless the still- evolving Omicron situation plays killjoy, the coming time is anticipated to be much more robust in terms of fund- raising conditioning and there seems to be no dearth of finances, experts said.

“The banks have been sitting on fat liquidity for quite a while and there should be enough appetite for quality borrowers, said Ricky Kirpalani, Lead Sponsor, First Water Capital Fund In the time passing in, fund mobilisation through debt requests has fallen sprucely, while the equity fund caregiving has been robust and the stock request bull- run with liquidity each- around has redounded in record fund- raising through original public immolations (IPOs).

Despite the plunge in fund mobilisation through the debt route, it continued to contribute a captain’s share to the overall fund- raising exertion in 2021 Debt fund- caregiving has braked because of long- term profitable dislocations during the first surge of the coronavirus epidemic, followed by a prolonged impact of the ruining alternate surge, said Sandeep Bhardwaj, CEO, Retail, IIFL Securities.

Out of the accretive ₹9.01 lakh crore garnered tillmid-December this time, finances totalling ₹5.53 lakh crore were mopped up from the debt request, ₹2.1 lakh crore came from the equity request, ₹ crore through REITs and InvITs and ₹1.06 lakh crore via the overseas route, data collected by analytics major High Database showed In 2020, enterprises raised ₹ 11 lakh crore, including ₹7.91 lakh crore through debt and ₹2.12 lakh crore through equity Explaining advanced fund- raising through debt route in 2020, Samir Sheth, Partner and Head-Deal Advisory Services, BDO India, said that businesses came to a halt as a strict lockdown was assessed since March 2020 and to manage the adverse impact of the same, corporates resorted to debts.

He further said that the stock request was down for the utmost part of the time and PE/ VC requests were also not that active, leaving businesses with many options other than a debt backing in 2020 Fresh capital was raised by companies for debt payment, to fund capital expenditure for new systems, to support inorganic growth like accessions as also for marketing and R&D purposes, said Satyen Shah, MD & Head, Investment Banking at Edelweiss Financial.

While companies wanted to have the liquidity to drift over misgivings related to the epidemic during 2020, it has been largely related to profitable growth in 2021 and businesses are raising finances primarily to expand, Sheth said Of the total ₹5.53 lakh crore raised through Indian debt requests in 2021, ₹5.38 lakh crore came from the private placement and ₹ crore was through public allocation “Indian debt requests are substantially tapped by the fiscal sector companies who use finances for onward advancing (as the profitable cycle gathers pace) and boost capital buffers,” said Ajay Manglunia, Managing Director & Head-Institutional Fixed Income, JM Financial.

Thenon-financial bunch deploys the finances majorly for general commercial charges, capital expenditure and capital for inorganic growth openings piecemeal from refinancing being debt, he added. In the equity request, finances substantially came from original share deals as ample global liquidity, robust equity request and massive equity participation pushed the IPO request to new situations this time Within the equity member, the IPO route helped companies raise ₹1.2 lakh crore, Good Institutional Placement (QIP) route added ₹ crore, rights issue of shares to being shareholders reckoned for ₹ crore, while Offer for Trade (OFS) through stock exchange medium contributed ₹ crore.

A aggregate of 63 IPOs mopped-up record ₹1.2 lakh crore, and Small and Medium Enterprise (SME) IPOs brought in ₹ 710 crore In comparison, ₹ crore were dredged in through 14 main- board IPOs, while ₹ 159 crore came via the SME member in 2020.

Buoyant stock requests and spectacular table earnings by some companies were the main factors driving the IPO delirium, said Piyush Nagda Head-Investment Product at Prabhudas Lilladher IIFL Securities’Bhardwaj believes that bullish line will continue in 2022 also for the IPO request and the new time might see a new record position of finances raised while the mega original share- trade of LIC is also in the channel.

Piecemeal from public issues, equity fund- raising through QIPs dropped to ₹ crore in 2021 from ₹ crore last time, primarily on account of vacuity of cheaper debt and anticipation of high valuations due to rising requests making promoters reluctant to adulterate Another reason for the decline in QIPs fund- caregiving could be prospects of a farther rise in stock requests as the requests were constantly rising from the morning of the time tillmid-November.

The number of QIPs in 2021 has been advanced than the last time, but the amount has been fairly lower Going forward, First Water Capital Fund’s Kriplani said that the fund collection through QIPs may pick up as the capex cycle is now reviving and valuations are rich Finances mobilised through the rights issue mode also plunged to ₹ crore in 2021 from ₹ crore last time. Bharati Airtel contributed a major knob with its ₹ crore rights issue this time.

The time 2020 had seen the largest ever rights issue of Reliance to the tune of ₹ crore, making this time look pale in comparison Still, finances collected via the OFS route– used for dilution of promoters’ effects– rose to ₹ crore this time, from ₹ crore in 2020 In addition, enterprises took structure investment trusts (InvITs) and real estate investment trusts (REITs) mode for raising finances and dredged in ₹ crore in the time passing in, lower than ₹ crore mustered in 2020.

Piecemeal from the domestic route, finances totalling ₹1.06 lakh crore have been raised through overseas bond requests and foreign currency convertible bonds (FCCBs), much lower than close to ₹ crore collected last time Going ahead, experts believe that a robust backing script for Indian enterprises will continue into 2022 for the equity as well as debt routes Considering the strong liquidity, Covid situation being under control, positive commercial earnings outlook and overall India growth story. We anticipate investors to continue to look at backing Indian enterprises,”Shah of Edelweiss Financial Services said.

According to BDO India’s Sheth, barring any large profitable impact of Omicron, overall profitable growth and significant backing script for Indian enterprises will continue into 2022 With respects to debt, IIFL Securities’Bhardwaj believes significant fund- raising through debt is likely to be in the coming many diggings as the frugality is back on track and private capex plans picking up. PTI SP BJ BJ