Despite challenges like geopolitical tensions, rising interest rates, and fluctuating commodity prices, India’s capital markets have performed exceptionally well in FY24. This reflects India’s strong economic position among emerging markets.
Capital markets are crucial for India’s growth, contributing significantly to capital formation and investments driven by technology, innovation, and digitalization.
In a favorable economic environment, primary markets stayed strong in FY24, facilitating capital formation of ₹10.9 lakh crore. This is about 29% of the total capital formation by private and public corporations, compared to ₹9.3 lakh crore in FY23. Debt issuances accounted for 78.8% of this amount, according to the Economic Survey.
Key Highlights:
- Fundraising Growth: Fundraising through equity, debt, and hybrid methods increased by 24.9%, 12.1%, and 513.6%, respectively, compared to the previous year.
- IPO Surge: The number of IPOs rose by 66%, from 164 in FY23 to 272 in FY24, raising ₹67,995 crore, a 24% increase from ₹54,773 crore in FY23.
- SME Activity: The number of IPOs/FPOs for SMEs grew by 1.6 times, from 125 in FY23 to 196 in FY24, with funds raised more than doubling from ₹2,333 crore to ₹6,095 crore.
Global IPO Trends:
- Indian exchanges led the world in IPO listings, increasing their share from 6% in 2021 to 17% in 2023.
Corporate Fundraising:
- Qualified Institutional Placements (QIPs): Became a key equity fundraising method.
- Rights Issues: Resource mobilization through rights issues more than doubled to ₹15,110 crore in FY24, from ₹6,751 crore in FY23.
Corporate Debt Market:
- The corporate debt market strengthened in FY24, with bond issuances rising to ₹8.6 lakh crore from ₹7.6 lakh crore in the previous year.
- Public issues of corporate bonds reached a record high, with funds raised at ₹19,167 crore, a four-year peak.
- Private placements dominated, accounting for 97.8% of total resources raised through the bond market.
- Outstanding corporate bonds increased by 5.5% year-on-year to ₹45 lakh crore, making up 15% of GDP by the end of March 2024.
Increasing investor demand and higher borrowing costs from banks have made the bond market more attractive for corporate funding needs.
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