There has been a significant increase in the process of raising capital from abroad by domestic companies

Ahmedabad: Indian companies raised less capital from abroad last year, but this is seen to increase significantly in 2024. Due to increased liquidity and low cost of hedging, there is strong demand for high-yield bonds from international investors.

Data compiled by Prime Database shows that from January to June Indian companies issued foreign bonds worth Rs. 32,619 crore, which is more than the total amount collected in 2023. In 2023, companies will issue foreign bonds worth Rs. 500 crore. 31,218 crore and in 2022 they raised Rs. 45,237 crore. Talking about the year 2021, domestic companies have raised Rs. 1.05 lakh crore.

Global yields were high due to the Federal Reserve's rate hike in 2023, which prevented Indian companies from raising capital from foreign bonds. During that period, companies made good profits from the domestic market.

Companies are raising debt through various means, meanwhile hedging costs have also come down and they are also turning to foreign markets because a large amount of debt is being taken from the domestic market. Companies cannot raise capital. Companies with comparatively low ratings also get fewer investors in the domestic market.

According to sources, borrowing activities have picked up in recent times and spreads have also improved but rates are still high. In such a situation, companies are turning to the dollar bond market. In view of the reduction in hedging costs after the rate cut in the US and the delay in rate cut in India, some companies are engaged in borrowing from the foreign market.