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Corporates to step up access to primary market
Our Bureau
New Delhi, Feb 28 Indian corporates would step up their access to the primary market to raise resources both through equity and debt issues. Alongside, the overseas issues (ADR/GDR) too are expected to gain in importance to supplement the domestic resource mobilization by the corporates, the Economic Survey for 2007-08 has said.
In calendar year 2007, total equity mobilised was Rs 58,722 crore, of which Rs 33,912 crore was accounted for by the initial public offerings (IPOs). During 2007, the total number of IPOs issued was 100 as compared to 75 in the previous year.
The Survey has said that strong projected economic growth and supportive policy initiatives would enhance investors’ preference to invest in financial instruments such as equity and debt papers. Corporate earnings are also expected to remain encouraging, the survey has said.
“If the recent pick-up in the amount of resource mobilisation by mutual funds and the assets they manage are any indication reflecting increased preference for investment in the capital market via mutual funds, the resources available with the financial institutions would increase. This would find its way to the capital market”, the Survey has said.
On the insurance companies’ recent efforts to broaden the geographical outreach and increase their innovative products, the Survey said this would strengthen their resource base and may stimulate their participation in equity and debt markets.
The Survey however noted that a major policy challenge was in the area of corporate debt market.
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