Funds raised by Indian listed companies through bonds increased in FY21 as the covid-19 pandemic forced companies to borrow money from investors to deal with the adverse effects of the downturn economic induced by the Covid-19 pandemic.
According to a press release issued by the Ministry of Finance, the amount raised through bond issues increased by 13.5% to ₹7,82,427,39 crore in FY 21 compared to ₹6,89,686,19 crore in the previous year. The number of bond issues also increased by 10% compared to 2003 times in the recently concluded financial year.
The funds raised by companies as part of the initial public offering (IPO) and follow-up public offering (FPO) increased significantly by 115% at ₹46,029.71 crore as the same rights issues also jumped 15% to ₹64,058.61 crore during the year. The union government has urged large corporations to borrow funds from bond markets to ease pressure on banks and create a vibrant corporate bond market in the years to come.
“Despite the uncertainty that prevails in fiscal year 2020-2021 due to the Covid-19 pandemic, fundraising in fiscal year 2020-2021 has been better than that of fiscal year 2019- 20 for matters of public interest and rights. In fiscal year 2020-2021, Rs. 46,029.71 crore and Rs. 64,058.61 crore were raised through public issues and rights respectively, against Rs. 21,382.35 crore and Rs. 55,669 , 79 crore raised last year. This is an increase of 115% and 15% respectively in fiscal year 2020-2021 compared to last year, ”the union government said in a statement.
Publicly traded companies and financial institutions resorted to fundraising through the issuance of bonds and rights in the first quarter of FY21, as companies halted due to strict foreclosure imposed by the union government to contain the spread of the Covid-19 pandemic.