Debt private placements hit all-time high of Rs 7.8 lakh crore in 2020

The pandemic year witnessed an all-time high fund mobilisation of Rs 7,77,473 crore through corporate bonds on private placement basis. According to PRIME Database, the amount mobilised in 2020 increased 10 per cent over Rs 7.10 lakh crore mobilised in 2019, when it clocked a higher growth of nearly 25 per cent.

The amount was raised by 637 institutions and corporates, last year. For this, deals, listed and unlisted, which have a tenor and put/call option of above 365 days have been considered.

According to Pranav Haldea, Managing Director, PRIME Database Group, this was driven by record low interest rates, surplus liquidity and introduction of liquidity windows by RBI.

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The highest mobilisation in 2020 was made by the All-India Financial Institutions/ Banks category at Rs 3,47,120 crore in comparison to Rs 3,37,468 crore in 2019. "An increase in mobilisation was also witnessed by private sector (excluding banks/FIs), up by 18 per cent to Rs 2,94,171 crore compared to Rs 2,49,335 crore in 2019. Amount mobilised by public sector undertakings (PSUs) also increased by 13 per cent to Rs 1,33,793 crore compared to Rs 1,18,336 crore in 2019," Haldea added.

Government organisations and government financial institutions, put together, mobilised 53 per cent of the total amount, lower than the 58 per cent in 2019.

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Around 43 per cent of the total amount (Rs 3.33 lakh crore) was in below 7 per cent coupon range and 36 per cent of the total amount (Rs 2.76 lakh crore) was in the 7-8 per cent coupon range. This was in contrast to 2019, wherein just 6 per cent of the issue amount was in below 7 per cent coupon range, 26 per cent in 7-8 per cent coupon range while a significant 41 per cent was in the 8-9 per cent coupon range, said the report.

Nearly 78 per cent of the overall amount were 'AAA' rated. Industry-wise, the banking/financial services sector continued to dominate the market, collectively raising Rs 4,96,771 crore or 64 per cent of the total amount. Roads & highways sector ranked second with a 7 per cent share (Rs 58,052 crore).

According to Haldea, 2021 may see a dip in issuance on account of easing of some of the liquidity measures and higher funding costs.

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