21 C
California
Tuesday, October 20, 2020

Indian companies raise record $31 billion equity capital in shrinking economy – Times of India

HONG KONG/BENGALURU: Indian companies have raised a record $31 billion in equity capital in 2020, Refinitiv data showed, as banks strengthen their balance sheets to prepare for future economic uncertainty and corporates tap into the elevated global liquidity levels.
The record raising comes despite India’s economy contracting 23.9% in the June-quarter, year on year, which puts it on track for the first annual contraction since 1980.
The rush of deals though has not been extended to initial public offerings (IPOs), which have fallen to a five-year low to be worth just $1.5 billion, in the eight months year to date, the data showed.

Banks have been the most active issuers, raising $13.68 billion, followed by the energy and power sector with $7.05 billion, and consumer products with $3.41 billion.

77924652 Indian companies raise record $31 billion equity capital in shrinking economy - Times of India

Reliance Industries’ $7-billion raising in June was the country’s largest, the data showed, as the company turned net debt-free and is now looking to expand its consumer business by acquiring Future Group’s retail arm.

Real estate companies were identified by corporate advisors as the most likely candidates to tap the markets further in 2020 as property demand is expected to return after the disruption caused by the coronavirus crisis.
Surging cash levels – helped by $15 trillion of stimulus made available for economies to withstand the fallout of the pandemic was primarily responsible for the raising rush, advisors said.
“We expect issuance to expand further to growth capital in the coming weeks and months, and the pipeline is developing across sectors,” said Citigroup’s India head of banking and capital markets Ravi Kapoor.
EY India partner Sandip Khetan said the banks’ raisings helped created “a cushion to the potential losses on account of credit losses” that could occur in the future.
Foreign appetite to buy Indian equities has risen sharply, with investors outside India buying $10.3 billion of new shares in the three months to August, the Refinitiv data showed.

77924681 Indian companies raise record $31 billion equity capital in shrinking economy - Times of India

“The interest from foreign investors has been very strong and that reflects the fact that the quality of issuers that have come to market have been from the Top 100 companies.” said Morgan Stanley’s executive director Samarth Jagnani.

Speak Your Mind

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Get in Touch

211FansLike
34FollowersFollow
41FollowersFollow

Recommend for You

Walmart divides Black Friday deals into 3 separate events that kick off online

An employee works on a display ahead of Black Friday at a Walmart store in Chicago, November 20, 2018.Kamil Krzaczynski | ReutersFor shoppers who...

‘This is insanity’: Doctors slam Trump’s drive to greet supporters outside Walter Reed hospital

US President Trump waves from the back of a car outside of Walter Reed Medical Center in Bethesda, Maryland on Ocotber 4, 2020.Alex Edelman...

‘Out of control’: European leaders scramble to control the second wave, with a state of emergency and lockdowns

A nurse gets ready to enter a room to take care of a patient infected with Covid-19 at the intensive care unit of the...

Facebook and Twitter CEOs will have to answer to Senate Republicans after Biden NY Post story controversy

Facebook and Twitter typically take heat for acting too slowly to reduce the spread of harmful misinformation. But on Wednesday, both companies acted surprisingly...

‘Lock Up The Bidens’: Trump Picks Target For Final Stretch – His Opponent’s Family

Topline President Trump has begun focusing a disproportionate amount of his attention at campaign events on his Democratic opponent Joe Biden’s family in an...

Related Articles

Titmouse To Livestream Its 5 Second Day Animation Showcase...

(Images courtesy of Titmouse Studios) Titmouse will live-stream...

Lionel Messi Tells FC Barcelona He Wants To Leave...

Lionel Messi has reportedly told FC Barcelona that he...

FPIs Turn Net Sellers in September, Pull Out Rs...

A security guard wearing a mask as a precaution against the new coronavirus stands...

COVID-19 Danger Continues To Drive Joblessness In US

FILE - In this July 15, 2020, file photo, one-stop operator Vickie Gregorio with...