Fund raising through QIP route brings in Rs 34,100 crore

Fund raising through QIP route brings in Rs 34,100 crore
The Hindu Business Line, January 05, 2010, Page 10

But debt offerings mop up Rs 1,44,700 cr; set five-year record.

BL Research Bureau

With foreign institutional investors taking a fancy to QIPs (qualified institutional placements), 2009 turned out to be a better year for equity fund-raising by Indian companies than the previous year.

However, equity issuances for the year – at Rs 72,000 crore (37 per cent higher than 2008) – were still dwarfed by debt offerings. Debt issuances, which raked in Rs 1,44,700 crore, set a five-year record in 2009.

These are the trends evident from Bloomberg's India Capital Markets League Table 2009, released on Monday.

While a resurgent stock market saw all modes of equity offering – IPOs, rights offers and QIPs – stage a revival, it was the last category that proved most popular in 2009.

A record Rs 34,100 crore were raised by the 51 QIPs made during the year. IPOs, 17 in number, mobilised a much lower Rs 19,300 crore, with the NHPC, Adani Power and Oil India offers garnering the lion's share. The bulk of QIP funds flowed into financial services companies, which took in nearly 45 per cent of the sum raised, followed by consumer products (17 per cent) and industrial companies (15 per cent).

According to Bloomberg, Morgan Stanley took the top slot in underwriting QIP offers, accounting for Rs 6,200 crore in deal value.

Despite the buoyant equity markets, IPOs did not raise much more than 2008, at Rs 19,300 crore compared to Rs 18,500 crore the previous year. Domestic investment bankers occupied the top honours as underwriters of IPOs, with Kotak Mahindra doing a deal value of Rs 4,100 crore followed by Enam Securities at Rs 3,600 crore.

It was, however, the debt market that took care of much of India Inc's appetite for funds in 2009. The Rs 1.44 lakh crore raised by companies through domestic bond offerings in 2009 exceeded the 2008 number by nearly 48 per cent. IIFCL, the largest bond issuer, raised Rs 7,300 crore.

Nearly three-fourths of these funds went to the financial services industry, followed by oil, gas and power majors who took in about 10.7 per cent of the debt funds raised. Axis Bank maintained its top position for the second consecutive year on Bloomberg's 2009 India Domestic Debt Table with a market share of 13.9 per cent.

Apart from bond offers, syndicated loans also grew strongly, raising Rs 4,660 crore in 2009. SBI continued to dominate the syndicated loan market, arranging over 59 per cent of the loans for the year.