Equity, equity-linked issuances down 73%, lowest since 2003

Mumbai, July 4: Funds raised by Indian companies through equities declined by 72.6% to $3.8 billion in the first half of 2016 — the lowest in the first half for Indian equity capital markets since 2003, a report by Thomson Reuters/Freeman Consulting said.

Follow-on offerings reduced to $2.6 billion , down 80.6% compared to last year, capturing 67.8% of India’s equity capital markets activity. The government sold its 5% stake in NTPC through an offer for sale and raised $733.9 million as part of its divestment programme.

However, there was some cheer in the Initial public offerings(IPO)sidewithcompanies raising a total of $1 billion, an increase of 78.7% compared to the same period last year after the number of IPOs increased 41.4%. This is the highest first half period for Indian IPOs since 2010 .

Energy and Power sector companies accounted for majority of the nation's equity capital markets with 30.5% market share and generated funds worth $1.1 billion.

Theywerefollowedbyfinancialsectorwith22.2%,Industrials(10.5%)andHealthcarewith 10.2% of equity capital market activity.

A total of $18.0 billion was raised through the issue of primary bonds, a decrease of 39.6% compared to the same period last year, and witnessed the lowest first half period since 2009.

The Indian Investment Grade bonds was also down by 40.9% compared to the first half of 2015 at $16.8 billion.

The rupee-denominated bonds also registered a decline of 33.2% at Rs1.08 lakh crore.

Citi took the lead for underwriting with $645.2 million in related proceeds and captured 17.1% of India’s equity capital markets activity.

ICCI Bank followed them with 15.9% and Edelweiss Financial Services Ltd with 12.4% market share.