Not-so-expensive credit avenues, benign capital markets and the scramble to built a liquidity war chest to fight pandemic-induced financial woes saw Indian companies mopping up close to Rs 10 lakh crore through equity and debt in 2020. And the bullish trajectory is expected to continue next year too.
With most of the developed markets awash with cheap credit, thanks to low interest regimes, entities from emerging markets like India tapped the low cost funding options. Debt route turned more attractive for many Indian corporates for multiple reasons, including that there won't be dilution of promoter equity, according to experts.
"Lockdown and social distancing norms affected a large number of projects. Further, a large number of companies announced fresh capacity expansion and a number of infra projects are likely to start in near term. Hence, fund mobilisation is expected to be higher in next year," Arjun Yash Mahajan, Head of Institutional Business at Reliance Securities, said. Out of the cumulative Rs 9.85 lakh crore garnered till December 15 this year, Rs 7.3 lakh crore was mopped up from the debt market, Rs 2.46 lakh crore came from the equity market and around Rs 7,100 crore through the overseas route, data compiled by analytics major Prime Database showed.
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