Fund raising from capital markets to jump 21% to Rs 14.27 lakh crore in FY25: Madhabi Puri Buch

Fundraising through capital markets, which includes both equity and debt instruments, is projected to increase by nearly 21% in FY25, reaching a total of Rs 14.27 lakh crore.  

This marks an uptick from the Rs 11.8 lakh crore raised in FY24, according to Securities and Exchange Board of India (Sebi) chief Madhabi Puri Buch, who shared this estimate on January 10. 

Buch noted that during the first nine months of the current fiscal year, entities have raised Rs 3.3 lakh crore through equity and Rs 7.3 lakh crore via the debt markets, bringing the total capital mobilised to Rs 10.7 lakh crore. 

Looking ahead to the final quarter of FY25, Buch projected that the total amount raised for the year in both equity and debt markets could surpass Rs 14 lakh crore, based on current trends. She shared this outlook while addressing a conference organised by the National Institute of Securities Markets (NISM) in Mumbai. 

A presentation by Buch highlighted the FY25 capital raising estimate of Rs 14.27 lakh crore. 

Buch also acknowledged that the contributions from real estate investment trusts (REITs), infrastructure investment trusts (InvITs), and municipal bonds to overall capital mobilisation have been relatively small, amounting to approximately Rs 10,000 crore in the first nine months of FY25. However, she expressed optimism that these instruments would see substantial growth over the next decade, potentially surpassing the funds raised through traditional equity and debt markets. 

In terms of regulatory efforts, Sebi is working to streamline the approval process for issuances, with a particular focus on reducing the time required to clear proposals from small and medium enterprises (SMEs).  

Currently, it takes up to three months for such SME issuances to be processed, while banks can approve in-principle applications in as little as 15 minutes. Buch emphasised that Sebi plans to leverage technology to further expedite this process. 

While IPOs often dominate attention, Buch reminded the industry that other fundraising avenues, including preferential issuances, institutional placements, and rights issues, also play important roles. These alternative mechanisms may sometimes go unnoticed but are vital to capital raising efforts. To support this, Sebi has introduced a system to expedite the approval of rights issues, and Buch expressed hope that the industry will adopt it. 

Highlighting Sebi’s faster approval process for mutual fund new offers, Buch also announced plans to launch systematic investment plans (SIPs) with a minimum investment of Rs 250, which is expected to further encourage investment in mutual funds. 

Buch commended the role of domestic institutional investors in mobilising resources in recent years, noting that their investments have been particularly crucial during periods of volatility when foreign portfolio investors may pull back. 

Addressing some of the criticism Sebi has received for moving quickly on various initiatives, Buch defended the regulator’s pace, emphasising that rapid action is necessary to meet the country’s developmental goals and aspirations.  

(With inputs from PTI)