Mumbai: Fund raising by companies has taken a beating in the second half of this financial year after a promising start in the beginning of FY19, as upcoming general elections and macro economic uncertainties dampened investor sentiment.
Indian companies raised far less compared to funds mobilised in the financial year 2018, which saw a record $11 billion being raised.
So far in this financial year, Rs 63,744 crore was raised through the public equity markets, a plunge of 60 per cent from the all-time high of Rs 1,60,032 crore in 2017.
Even fund raising through qualified institutional placements (QIPs) saw a dip with 25 companies raising Rs 16,677 crore through this route, 73 per cent lower than the Rs 61,148 crore raised in the previous year. The largest QIP of 2018 was from Idea Cellular raising Rs. 3,500 crore, accounting for 21 per cent of the total QIP amount.
In the amount of Rs 63,744 crore, fresh capital was Rs 29,224 crore (46 per cent), the remaining Rs 34,520 crore being offers for sale.
Experts feel that the companies will be holding back their fund raising plans till the general elections are over.
“Not too much action is likely to be seen at least in the first half of 2019 till the conclusion of the national general elections,” says said Pranav Haldea, MD, Prime Database.