Bonds, CBs record sales at $7.8 bn in 2006
By Babina Wahengbam, INDIATIMES NEWS NETWORK |
NEW DELHI: India, Inc. tapped the debt market in a big way to part-fund their acquisitions abroad and expand their operations in the country.
The Indian corporates have mobilised a whopping $7.8 billion from the debt market during 2006 to take the second place in Asia.
Barclays Capital, the investment banking division of Barclays Bank Plc, in a news release said that sale of bonds and convertible bonds by Indian companies and financial institutions surged to a record $7.8 billion, a 47% increase on 2005.
This record amount includes a 22% increase in convertible bond issuance of $4.9 billion and overseas bond issuance of $2.9 billion, more than double the $1.3 billion raised in 2005.
"For this year, I believe the growth trajectory will be far steeper and more robust," said Madan Menon, Barclays Capital Co-CEO of India.
According to him, India, Inc. may have a second consecutive year of record issuance of bonds and bonds convertible into equity in 2007, as companies and financial institutions continue to fund their expansion in an economy that has grown by an average of 8 per cent for the past three years.
"Indian companies need funds to fuel future growth and we expect this to continue for the foreseeable future," said Menon. "We see continued strong demand for quality issues that are reasonably priced in both the bond and convertible bond markets."
Foreign Currency Convertible Bonds (FCCBs) from India gained popularity in recent years partly due to the robust local stock market as well as rising interest rates.
Barclays Capital managed six of the 11 bond issues by Indian banks in 2006, underwriting a total of $930 million. Of the 11 deals, seven involved subordinated debt.
The Indian corporates have mobilised a whopping $7.8 billion from the debt market during 2006 to take the second place in Asia.
Barclays Capital, the investment banking division of Barclays Bank Plc, in a news release said that sale of bonds and convertible bonds by Indian companies and financial institutions surged to a record $7.8 billion, a 47% increase on 2005.
This record amount includes a 22% increase in convertible bond issuance of $4.9 billion and overseas bond issuance of $2.9 billion, more than double the $1.3 billion raised in 2005.
"For this year, I believe the growth trajectory will be far steeper and more robust," said Madan Menon, Barclays Capital Co-CEO of India.
According to him, India, Inc. may have a second consecutive year of record issuance of bonds and bonds convertible into equity in 2007, as companies and financial institutions continue to fund their expansion in an economy that has grown by an average of 8 per cent for the past three years.
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"Indian companies need funds to fuel future growth and we expect this to continue for the foreseeable future," said Menon. "We see continued strong demand for quality issues that are reasonably priced in both the bond and convertible bond markets."
Foreign Currency Convertible Bonds (FCCBs) from India gained popularity in recent years partly due to the robust local stock market as well as rising interest rates.
Barclays Capital managed six of the 11 bond issues by Indian banks in 2006, underwriting a total of $930 million. Of the 11 deals, seven involved subordinated debt.
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