Fund-raising through debt and equity by Indian companies touched an all-time high in FY25. This was primarily fuelled by high valuations that offered attractive opportunities for stake dilution.
According to Prime Database, equity fund raising stood at Rs 3,71,460 crore in 2024-25, an increase of 92% from Rs 1,90,104 crore raised in 2023-24, adding rights issues of Rs 16,167 crore (including of InvITs/ReITs), the overall equity fund raising nearly touched Rs 3.88 lakh crore in 2024-25.
Similarly, debt fund-raising also reached an all-time high of Rs 11,12,375 crore (including of InvITs/ReITs) of which Rs 11,04,331 crore was through private placement of debt and Rs 8,044 crore through public bonds.
The report revealed that 78 corporates raised Rs 1,62,387 crore through main board initial public offerings (IPOs), more than 2.5 times of Rs 61,922 crore mobilised by 76 firms in the earlier financial year. According to Pranav Haldea, Managing Director, PRIME Database Group, new age technology companies (NATCs) made a comeback in 2024- 25, after 2 relatively quiet years, with 8 IPOs (Awfis, Blackbuck, Digit Insurance, Firstcry, Ixigo, Mobikwik, Swiggy and Unicommerce) raising Rs 21,438 crore.
Moreover, retail investors’ interest increased in these offers, as the average number of applications from retail rose to 21.33 lakh in 2024-25, in comparison to 13.15 lakh last year. While this was buoyed by strong listing performance, according to Haldea. 46 of the 78 IPOs continue to trade above the issue price.
In fact, the average return of the 78 IPOs of 2024-25 has been 15%, despite the market correction in the second half of the year. This bursts the myth that IPOs are “always overpriced” and do not provide long-term returns, added Haldea.
Sorbh Gupta, senior fund manager at Bajaj Finserv Asset Management said, “In fact, banks’ credit offtake wasn’t so great, primarily because promoters were able to raise capital in debt and equity market quite easily in the first half of the year. Of course, things did get bit tighter in the latter half of the year.”
Market experts believe that if private capex picks up in the next financial year, more capital might be raised by companies. However, it will be a function of the market conditions. Gupta expects things to improve in the second half of the next financial year.
Ajit Mishra, senior vice president of research at Religare Broking said debt fund-raising has reached record levels due to lower yields and robust investor demand. He added that both promoters and private equity firms were able to capitalise on the market momentum to reduce debt and raise growth capital.
The report also noted that the pipeline continues to be staggering, with 49 companies with Sebi’s approvals, are proposing to raise as much as Rs 84,000 crore. In addition, another 67 companies are awaiting Sebi’s approval to raise about Rs 1,02,000 crore. However, according to Haldea, given the recent market volatility, issuers seem to be in a wait-and-watch mode. In March, there were no mainboard IPOs – the first month since May 2023.
