NEW DELHI: Riding high on the buoyancy in the stock market, corporates will increasingly rely on public issues to raise funds as monetary measures lead to hardening of interest rates, the Survey said.

Fund raising through public issues, private placements and Euro issues will remain upbeat, the pre-budget Economic Survey said.

It noted that ``recent policy initiatives to address systemic issues related to the primary capital market may increase reliance on public issues as a major source of funds for Indian corporates, besides helping to broaden the investor base''.

The Survey added that the investors' growing preference for the mutual fund route would further enhance institutional investment in equity markets, which along with regulatory support, could counter-balance and cushion the impact of swings in the stock prices.

The upbeat investor sentiment helped mobilise over Rs. 2,66,700 crore in the capital market through the primary market and mutual fund routes in 2006, it added.

After registering a growth of 30.5 per cent in aggregate mobilisation, especially through private placements and initial public offerings, the primary capital market has remained upbeat in the current fiscal so far. PTI