As bank credit remained costly given the high interest rate, Indian firms turned to private placement market to mobilise funds which jumped 29 per cent in the first quarter to Rs 64,250 crore, while bank credit grew just about 20 per cent to the industry as a whole, driven largely by the oil sector.
"The fund-raising in the April-June period touched Rs 64,250 crore, an increase of 29 per cent or Rs 49,859 crore mobilised in the same period previous year," says a report by Prime Database.
This debt amount was mobilised by 86 Indian institutions and companies, according to a report by Prime Database which claims to operate the only database on debt private placements in the country, according to the agency chairman and managing director Prithvi Haldea.
The highest mobilisation was by PFC (Rs 8,398 crore), followed by HDFC (Rs 4,790 crore), Hindalco (Rs 4,500 crore) and Nabard (Rs 4,379 crore), he said adding his agency tracks only those deals, which have a tenor and put/call option of over a year.
According to the data released by Prime Database here today, on an industry-wise basis, the financial services sector continued to dominate the private debt market, collectively raising Rs 41,816 crore or 65 per cent of the total amount, followed by the power sector with a 9 per cent share at Rs 5,474 crore.
Against this, according to banks, during the period, non-food credit grew a poor 19.5 per cent, down from 23.8 per cent a year ago. Had it not been for a good 400 basis points increase farm credit, to 16.8 percent from 12.8 per cent a year go, growth would have even lower.
During Q1, the bank credit to the oil sector nearly doubled to 25.2 per cent, up from 14.2 per cent, taking the overall credit flow to the industrial sector up by 20.3 per cent, show banking data.
As per the Prime report, the biggest mop-up was again carried out by financial institutions/banks which together raised Rs 32,980 crore, a tad over 50 per cent of the entire mop-up. But this was down from the comparable period last year when it stood at Rs 35,299 crore, representing a decline of 7 per cent, says Haldea.
However, the maximum growth in terms of percentage was seen by the state-level financial institutions, which together mobilised Rs 496 crore compared to a poor Rs 3 crore in the corresponding period previous year, he