New Delhi: With debt instruments leading the way, Indian companies have garnered an estimated Rs 6.3 lakh crore from the marketplace in 2016.
Experts believe the corporates will continue to prefer debt route over equity markets for raising capital in the new year as well in the wake of the fall in interest rates, surplus liquidity in the banking system and an easier regulatory framework for issuance of debt securities.
Sentiments in equity markets have also weakened due to the demonetisation move and experts believe this trend may continue at least for the initial part of 2017.
Out of the cumulative total of Rs 6.3 lakh crore garnered this year from capital markets in 2016, a large chunk or more than Rs 5.5 lakh crore has been mopped up from debt market.
In 2015, firms had raised a similar amount and most of the funds were mobilised through debt markets that year too.
Fresh capital collected from equity market stands at nearly Rs 80,000 crore for 2016, which mostly came from preferential share allotments to promoters and initial public offerings.
These funds have been raised mainly for expansion of business plans, repayment of loans and to support working capital requirements.
"In the wake of the fall in interest rates, surplus liquidity in the banking system and an easier regulatory framework for issuance of debt securities, firms may find debt as the preferred route for raising capital in 2017," Bajaj Capital's Senior VP and Head of Investment Analytics Alok Agarwala said.
"With surplus liquidity and lower lending rates, banks may be preferred as a source of capital in 2017. As interest rates and emerging market currency volatility have risen globally, firms shall find domestic markets relatively more attractive as compared to overseas markets for raising money," he added.
With PTI Inputs