Capital crunch? India Inc raises over Rs 1,50,000 cr in 2009

Companies knocking on government doors for bailout funds may have been the norm in the West, but India Inc begged to differ from this rule by raising over Rs 1,50,000 crore of capital for expansion from investors across the world in 2009.

Companies knocking on government doors for bailout funds may have been the norm in the West, but India Inc begged to differ from this rule by raising over Rs 1,50,000 crore of capital for expansion from investors across the world in 2009.

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The biggest irony is that nearly two-thirds of these funds are estimated to have come from investors in overseas markets, which themselves were in shambles and where companies were in dire need of capital, forcing them to beg their respective governments for money.

Also, Indian companies took the quickfire QIPs (Qualified Institutional Placements) to meet their immediate capital needs, instead of the time consuming Initial Public Offering route.

As a result, the funds raised by Indian companies during 2009 were more or less equal to the levels seen in 2008, when economic downturn was not a reality for most part of the year.

Besides, the response was more than required as demonstrated by the books being highly over-subscribed for most QIPs and even some IPOs.

A total of about 50 companies raised a record-breaking cumulative figure of about Rs 55,000 crore through sale of shares to qualified institutional investors, mostly overseas private equity firms and also local and foreign financial services firms like banks, insurers and fund houses.