Despite the covid-19-led disruptions, India Inc. raised ₹1.04 trillion from the capital markets between January and June, according to Prime Database. Indian companies had raised ₹81,052.72 crore in the year-ago period, and another ₹45,233.41 crore during July-December 2019.
The fundraising activity was dominated by Reliance Industries’ mega ₹53,124.20 rights issue in May, which was oversubscribed 1.6 times. Besides, Piramal Enterprises raised ₹3,630.85 crore, Bajaj Electrical ₹349.99 crore and Brooks Laboratories ₹15.33 crore.
According to analysts, markets regulator Sebi’s change in norm may have helped companies raise funds through rights issues. In April, Sebi had granted a one-time relaxation in its primary market fundraising norms to make it easier for companies to raise capital amid the covid-19 pandemic.
It also extended the period of approval for initial public offerings and rights issues by six months. This will be applicable to companies where Sebi’s approvals have expired, or were due to expire on 1 March and 30 September.
“Companies are raising additional capital through rights issues not to spruce up its balance sheet but to repay debt in this crisis time when banks and other lenders have increasingly become risk averse. We may see more rights issue in this fiscal year,” said an analyst, requesting anonymity.
In the first half of 2020, ₹10,419.36 crore was raised via IPOs, ₹8,282.88 crore through offer-for-share and ₹28,573.14 crore via QIPs.