India’s corporate bond market has had a phenomenal year, recording a record high of Rs 9,97,804 crore (around $1.2 trillion) raised through private placements in the financial year 2023-24. This represents an increase of 17% from the previous year, according to data from Primedatabase.com, a leading source of information on India’s primary capital market.
This was mobilized by 976 institutions and companies. Such transactions, listed and unlisted, whose duration and put/call option exceed 365 days, have been taken into account.
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Financial institutions and banks are leading the pack: The highest mobilization came from banks and financial institutions, collecting Rs 4,67,995 crore. This reflects an 8 percent increase from the previous year, highlighting their continued reliance on corporate bonds for funding.
The private sector is experiencing a sharp increase: The private sector (excluding banks and financial institutions) also saw a significant increase, mobilizing Rs 4,96,446 crore, representing a jump of 44 per cent compared to the financial year 2022-23.
Government entities maintain their presence: Government entities collectively raised 39% of the total amount, a slight decrease from 41% the previous year. According to primedatabase.com, among government entities, financial institutions/banks across India lead with a share of 91 percent, followed by an 8 percent share by PSUs.
Main emitters: The highest mobilization through private placements of debt during the year was from NABARD (Rs 65,393 crore), followed by REC (Rs 52,140 crore), HDFC (Rs 46,062 crore), PFC (Rs 45,130) and SIDBI (Rs 38,600 crore). The top 5 issuers of 2023-24 raised Rs 2,47,505 crore (or 25% of the total) compared to Rs 2,48,719 crore (or 29% of the total) raised by the top 5 issuers of 2022-23.
Summary by Tenor: The maximum amount of funds was collected in the above 10-year maturity bracket (Rs 3.29 lakh crore or 33 percent of the total amount), followed by the 3-5 year maturity bracket (Rs 2.78 lakh crore or 28 percent of the total amount).
Summary by credit score: Issues of up to Rs 6.63 lakh crore, or 66 per cent of the overall amount, were rated AAA.
Summary by sector: Industrially, the banking and financial services sector continued to dominate the market, collectively collecting Rs 7,26,541 crore, or 73 per cent of the total amount. The housing/civil construction/real estate sector ranks far behind with a share of 6% (₹60,426 crore).
433 new transmitters were introduced to the market in 2023-24, compared to 414 last year.
In addition to the above, 17 Infrastructure/Real Estate Investment Trusts (InvIT/ReIT) have also privately placed bonds worth Rs 14,155 crore in 2023-24 (2022-23: 9 InvIT/ ReIT, Rs 4,900 crore).
Public obligations: The public bond market witnessed an increase of nearly 179 per cent with 48 issues raising Rs 20,787 crore, compared to 32 issues raising Rs 7,444 crore last year. The largest issue was from Power Finance Corp., raising Rs 2,824 crore.
Foreign bonds: Additionally, Indian companies also raised Rs 3.79 lakh crore through overseas borrowings (including ECB dollars), up 71% from Rs 2.22 lakh crore in 2022 -23.
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