How was the capital raising scenario in India during the year 2020 so far?

The latest annual numbers put out by Prime Database has made some interesting observations about capital raising in the Indian markets in the year 2020.

· It was actually a good year for capita raising. Despite being a pandemic year, 2020 saw Indian companies raise Rs.985,000 crore via equity and debt put together.

· On the one hand, equities were helped by buoyant capital markets and liquidity while bonds got support from low borrowing costs.

· If you break up the Rs.985,000 crore raised during the year, Rs.735,000 crore came from debt and Rs.250,000 crore came from equities.

· On the debt side, nearly 98% of the funds raised were through the private placement route to HNIs and qualified institutional buyers.

· Capital raising overall got an enthusiastic response on the back of economic recovery, positive cues on vaccine program, ample liquidity and global appetite for EM paper.

· The funds raised in 2020 are nearly 5% lower than the funds raised in 2019. That is truly commendable considering the challenges faced by Indian companies during 2020.

· Funds were essentially raised by Indian companies to create a war chest, for future expansion plans and in many cases to repay high cost debt.

Overall, despite a tough year, capital raising has been quite active during the year.