Despite the uncertainty due to the Covid-19 pandemic, fundraising through public equity and debt markets surged in 2020-21, the Finance Ministry said in a statement Wednesday. Funds raised by companies through public and rights issues surged 115 per cent and 15 per cent, respectively, in FY21. Total funds raised through public and rights issue rose nearly 42 per cent to Rs 1.10 lakh crore in 2020-21 from Rs 77,052 crore in 2019-20.
“During 2020-21, Rs 46,029.71 crore and Rs 64,058.61 crore were raised through Public Issues and Rights Issue, respectively, as against Rs 21,382.35 crore and Rs 55,669.79 crore raised last year. This is an increase of 115 per cent and 15 per cent, respectively, in 2020-21 as compared to last year,” the Ministry said.
Similarly, around 2,003 issues of corporate bonds were issued for an amount of Rs 7.82 lakh crore 2020-21, as compared Rs 6.89 lakh crore through 1,821 issues for fiscal 2019-20, it noted. A record amount of liquidity infusion by global central banks as well as the Reserve Bank of India helped blue chip companies raise funds from public markets, despite uncertainties surrounding the economy.
“Indian capital market has shown its resilience to withstand the ripples caused by exogenous shocks like the pandemic. Assets under management (AUM) of mutual fund industry increased by 41% from Rs 22.26 lakh crore as on March 31, 2020 to Rs 31.43 lakh crore as on March 31, 2021. The number of unique investors across mutual fund schemes also increased by 10% from 2.08 crore as on March 31, 2020 to 2.28 crore as on March 31, 2021,” the government said.
With the increasing expansion of the mutual fund industry in smaller cities, the AUM from below the top 30 cities increased by 54 per cent from Rs 3.48 lakh crore as of March 31, 2020, to Rs 5.35 lakh crore as of March 31, 2021, the ministry said.
Bank deposits have also been rising even as credit growth has not kept pace with the expansion in deposits. Despite over a 100-basis point decline in interest rates, bank deposits surged by 11.4 per cent during the financial year ended March 2021, as against 7.9 per cent in the previous year. However, credit growth declined to 5.6 per cent in FY21 from 6.1 per cent in the previous year, according to RBI data.