S. Varadharajan

Govt. organisations and FI floats dominate

Private sector sees a fall in mobilisationRs. 5,647 cr. raised through pass-through certificates

CHENNAI: The recently-concluded fiscal 2005-06 witnessed a mobilisation through corporate bonds on private placement basis of Rs.79,446 crore, representing a huge increase of 43 per cent over Rs. 55,409 crore mobilised in the previous year according to Prithvi Haldea of PRIME which operates the country's premier database on debt private placements. It may be mentioned that full 2001-02, 2002-03, 2003-04 and 2004-05 had witnessed mobilisation of Rs. 45,427 crore, Rs. 48,424 crore, Rs. 48,428 crore and Rs. 55,409 crore respectively. Only such deals which have a tenor and put/ call option of more than 1 year are reflected in this database. According to PRIME, the major reason for this substantial increase was due to the mobilisation by the financial institutions /banks. The share of this sector at a huge Rs.59290 crore grew by 80 per cent compared to Rs.32935 crore in the previous year.

The other sector which witnessed growth was public sector enterprises, whose mobilisation went up by 66 per cent from Rs. 6,441 crore to Rs. 10,719 crore. On the other hand, a major fall in mobilisation came from state level undertakings, down by 75 per cent to Rs. 889 crore compared to Rs. 3,544 crore in the previous year. State financial institutions also recorded a fall, down from Rs. 2,381 crore to Rs. 718 crore, representing a 70 per cent decline.

Significantly, a fall in mobilisation, according to Mr.Haldea, also came from the private sector, down by 23 per cent to Rs. 7,829 crore compared to Rs. 10,108 crore in the previous year.

Government organisations and financial institutions, put together, witnessed an increase, mobilising 90 per cent of the total amount, up from 82 per cent in the previous year. Among government organisations, all-India financial institutions/ banks led with a 75 per cent share.

According to Mr. Haldea, on an industry-wise basis, the financial services sector continued to dominate the market, raising Rs. 59,977 crore or 75 per cent of the total amount. Power ranked second with a 10 per cent share (Rs. 7,660 crore), followed by food (Rs. 4,581 crore).

According to PRIME, in addition to the above one-year tenor mobilisation of Rs. 79,446 crore, a significant additional amount of Rs.13,009 crore was raised through 507 deals of less than one year tenor bonds by 52 issuers (previous year Rs. 11,517 crore). Moreover, an amount of Rs. 5,647 crore (previous year Rs. 16,882 crore) in 41 deals was raised through pass-through certificates (securitised paper).