Economic recovery: Fundraising in FY21 defies Covid-19, up 115%

Virendra Pandit 

New Delhi: That Indian economy is in an irreversible post-coronavirus recovery mode became clear yet again on Wednesday when numbers of the market response to raise funds in the financial year 2020-21 came: fundraising for public issues jumped by 115 percent in FY21.

Right issues saw an increase of 15 percent.

According to a Union Finance Ministry statement, the global pandemic did not affect fund mobilization through the capital market as FY-21 saw resources raised through the public issues more than doubled.

Mutual funds and corporate bond markets also registered good growth.

“Despite the uncertainty prevailing in FY 2020-21 owing to Covid-19 pandemic, fundraising in FY 2020-21 was better than that in FY 2019-20 for both public and rights issues,” the statement said.

Data compiled by the ministry revealed that fundraising through public issues jumped 115 percent during FY 21 while growth was 15 percent for rights issues. Similarly, the number of unique investors across different kinds of mutual funds grew by 10 percent. The number of issues in the corporate bond market also increased by 10 percent.

Mutual funds also showed similar sentiments. The Assets under management (AUM) of the mutual fund industry increased by 41 percent to Rs. 31.43-lakh crore as of March 31, 2021, from Rs. 22.26-lakh crore as of March 31, 2020.

During this critical period, the number of unique investors across mutual fund schemes also increased by 10 percent to 2.28 crore.

With the increasing expansion of the MF industry in smaller cities, the AUM from below the top 30 cities increased by 54 percent to over Rs. 5.35 lakh crore from Rs. 3.48 lakh crore. Investors in this industry chose to invest in any of the 1,735 mutual fund schemes across categories as per their investment objective as of March 31, 2021, the report said.

Likewise, around 2003 issues of corporate bonds for an amount of over Rs. 7.82-lakh crore took place in FY 21, surpassing the amount raised (around ₹6.90-lakh crore) in the corresponding period a year ago.

While the number of issues increased by 10 percent during FY 21, the amount raised increased by 13.5 percent as compared to the previous financial year.