India Inc’s fundraising through rupee bonds slowed in FY24, after strong growth in the previous fiscal due to a change in tax rules and as companies made showing restraint in expecting lower returns. In FY24, companies raised ₹11.06 trillion through rupee bonds, an all-time high, but the 21% growth was slower than the 51% recorded in the previous year.
Indian companies raised ₹9.9 trillion in FY23. Similar growth was also recorded in 2021, when companies raised ₹570,651 crore, an increase of 54.6% from ₹570,651 crore in FY20.
“Recent tax changes to debt mutual funds, which were part of bond ownership, have had a significant impact on capital flows. Following the regulatory changes announced in the February 2023 Budget, the tax for the highest bracket was increased from 20% with indexation to 39-40% without indexation. In the current post-tax scenario, investments in these instruments have become less attractive for investors looking for optimal returns,” Marzban Irani, Chief Investment Officer for Fixed Income at LIC.
According to Vinay Pai, head of fixed income at Equirus: “HDFC
“Propel economic growth to reach a $5 trillion economy
Reliance Industries (₹20,000 crore), Nabard (₹16,572 crore), HDFC Bank (₹15,000 crore) and Goswami Infratech (₹14,300 crore) were among others which issued rupee bonds during the exercise 24.
“Last year (FY23), the higher growth occurred on a lower base and liquidity was high for low yielding bonds compared to current market liquidity and better returns in the capital market own,” Mahesh Singhi, founder and managing director of investment banking firm Singhi. Councilors said.
According to Manisha Girotra, CEO of Moelis & Company: “It was a little slower, given that manufacturing was slower and bank lines were available. In FY25, we expect the manufacturing sector to recover due to increased production capacities of companies. We can expect increased activity after the elections.”
“India