Despite heightened geopolitical risks, rising interest rates, and volatile commodity prices, Indian capital markets were among the best-performing in emerging markets in FY24, reflecting India's robust economic position.
Capital markets are playing a crucial role in India's growth, with an increasing share in capital formation and the investment landscape driven by technology, innovation, and digitisation.
Amidst healthy domestic economic performance and a favorable investment climate, primary markets remained strong during FY24, facilitating capital formation of ₹10.9 lakh crore, which approximates 29% of the gross fixed capital formation of private and public corporations during FY24, compared to ₹9.3 lakh crore in FY23. Of the total amount mobilised in FY24, 78.8% was raised through debt issuances, according to the Economic Survey
The survey shows that fund mobilisation through equity, debt, and hybrid modes increased by 24.9%, 12.1%, and 513.6%, respectively, in FY24 compared to the previous year.
The number of initial public offers (IPOs) increased by 66% in FY24, rising from 164 in FY23 to 272 in FY24, while the amount raised grew by 24%, from ₹54,773 crore in FY23 to ₹67,995 crore in FY24.
The survey points out that the SME platforms saw heightened activities during FY24, with the number of IPOs/FPOs (follow-on public offers) of SMEs increasing by 1.6 times, from 125 in FY23 to 196 in FY24. The corresponding funds raised more than doubled, rising from ₹2,333 crore in FY23 to ₹6,095 crore in FY24.
The survey, citing the E&Y Global IPO Trends report, emphasised that Indian exchanges led the world in IPO listings. India's share steadily increased, reaching 17% in 2023, up from 6% in 2021 and 11% in 2022.
Reflecting buoyant market conditions, the survey said that qualified institutional placements (QIPs) emerged as a critical equity fundraising mechanism for corporates during FY24. Resource mobilisation through rights issues more than doubled to ₹15,110 crore during FY24, compared to ₹6,751 crore in the previous year, the survey pointed out.
According to the survey, the corporate debt market in India is going from strength to strength. During FY24, the value of corporate bond issuances increased to ₹8.6 lakh crore from ₹7.6 lakh crore during the previous financial year.
The number of corporate bond public issues in FY24 was the highest for any financial year so far, with the amount raised ( ₹19,167 crore) at a four-year high. Private placements remained the preferred channel for corporates, accounting for 97.8% of total resources mobilised through the bond market.
Increasing investor demand and the rise in the cost of borrowing from banks have made these markets more attractive for corporates for funding requirements. The quantum of outstanding corporate bonds increased by 5.5% YoY to ₹45 lakh crore, which accounts for 15% of GDP at the end of March 2024, the survey noted.
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