Bonds via private placement down 59% in Q1

Mumbai: The first quarter’s mobilisation of debt (bonds) this fiscal through the private placement route has dipped a massive 59 per cent with only Rs 5,068 crore being mobilised by 42 institutions and corporates, compared to Rs 1,2375 crore by 82 issuers in the corresponding quarter of the previous fiscal.

Disclosing this in a review of the debt private placements during the Q1 of 2002-03, Prithvi Haldea of Prime Database says: “On a quarter-on-quarter basis, the April-June period registered a decline of 64 per cent over Rs 1,3906 crore mobilised in the January-March quarter. For the first time in six years, such a decline on a year-to-year basis has been witnessed and the downward trend has continued into the new year.” Incidentally, Rs 46,220 crore was raised in the full previous year.

Significantly, the private sector for the first time this quarter gained the top sectoral position. But its share at Rs 1,876 crore was still 56 per cent lower — compared to the same quarter in the previous year. Most of the private sector debt was of AAA category and was raised for retirement of old expensive debt or acquisitions. Leading the mobilisers in this sector was RIL (Rs 340 crore), followed by GE Capital (Rs 270 crore), Indo Gulf (Rs 200 crore), Ballarpur (Rs 140 crore) and Ashok Leyland (Rs 125 crore).

The major decline in mobilisation was because the state-level undertakings recorded a 68-per cent fall from Rs 1,696 crore to Rs 550 crore. The directives of the Reserve Bank of India to banks to become more diligent with investments in debt private placements, especially those made by SLUs, as well as the rising incidence of defaults on interest payments by SLUs, was the major reason for the decline, says Haldea.

The quarter, as per Prime, also witnessed a 67-per cent decline in mobilisation by the all-India financial institutions and banks — down from Rs 4,346 crore to Rs 1,449 crore. Leading the pack of mobilisers in this category was HUDCO (Rs 450 crore) followed by IDBI (Rs 259 crore), IRFC (Rs 205 crore) and Exim Bank (Rs 175 crore).

The raisings by public sector units too saw a 46-per cent decline. While the previous year’s quarter had seen a mobilisation of Rs 1,670 crore, only Rs 904 crore was raised in the current quarter. The major mobilisers were SAIL (Rs 500 crore), NTC (Rs 200 crore) and IPCL (Rs 125 crore).

As per Prime, government organisations and financial institutions put together still continued to dominate, mobilising a high 63 per cent of the total amount, though down from 76 per cent in the previous year and 83 per cent in 2000-01.