India Inc prefers equities to bonds for mobilising funds

By SiliconIndia   |   Thursday, 20 May 2004, 07:00 Hrs
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NEW DELHI: Corporates appear to be preferring equities to bonds for mobilising resources, going by the surge in equity offerings and a negative growth in bonds.

The total mop-up through equity offerings increased 17 times to Rs 17,821 crore during 2003-04, but the growth in mobilisation through bonds dipped by eight per cent, Prime Database said in its annual review.

Total mop-up through bonds declined to Rs 4,324 crore from Rs 4,693 crore in 2002-03, it said.

Of this, ICICI Bank raised Rs 1,352 crore as against the previous year's collection of Rs 2,342 crore, while IDBI mopped up Rs 2,972 crore compared to Rs 2,351 crore in the previous year.

Of the total mop-up through offers for sale, 98 per cent or Rs 15,127 crore was through disinvestments in seven Government companies, Prime said.

"The huge increase came by way of offers for sale, up from Rs 59 crore to Rs 15,514 crore. Significantly, a high 98 per cent or Rs 15,127 crore of this was accounted for by seven Government disinvestments," it said.

Though the total mop-up had risen by 286 per cent from Rs 5,732 crore in 2002-03, in terms of fresh capital, the amount was still a meagre Rs 2,307 crore.

The review also pointed that even though there was a strong surge in public offerings to Rs 22,145 crore in 2003-04, project financing from the issues stood at a meagre Rs 904 crore.

Project funding by money raised through public issues touched a zenith of Rs 5,415 crore in 2000-01.

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