Corporate India's appetite for funds appears to have lessened in the last financial year. In spite of burgeoning initial public offerings, fund mobilisation by Indian companies through debt and equity issues in the year grew only 14 per cent, against close to 40 per cent in each of the earlier three financial years.

According to PRIME database, funds raised through initial public offers in India increased by 120 per cent and funds mobilised overseas grew 29 per cent.

At the other end of the spectrum was a 90 per cent fall in funds raised through follow-on offers, against a 90 per cent rise in 2005-06, and only a 2 per cent rise in proceeds from corporate bonds, compared with 47.7 per cent in the previous year.

Banks' investments in corporate bonds in 2006-07 fell by Rs 7,000 crore (Rs 70 billion) to Rs 55,000 crore (Rs 550 billion).

A bond dealer with a private sector bank said banks stayed away from corporate bonds because of rising interest rates. Also, companies depended more on overseas markets than the domestic one to mobilise resources.

India Inc raised a record Rs 1,86,592 crore (Rs 1,865.92 billion) in 2006-07 through public issues, follow-on issues, overseas issues and private placement of debt. In absolute terms, the funds mobilised in 2006-07 were Rs 22,826 crore (Rs 228.26 billion) more than the Rs 1,63,766 crore (Rs 1,637.66 billion) raised in 2005-06.

Private debt placements accounted for 45 per cent of the total fund mobilisation. Overseas placements accounted for 37 per cent, while public offers including initial and follow-on offers constituted a 15 per cent share. Qualified Institutional Placements, allowed six months ago, accounted for 3 per cent.

As many as 440 companies raised Rs 83,622 crore (Rs 836.22 billion) in 2006-07, against Rs 81,847 crore (Rs 818.47 billion) raised by 366 firms last year, through private placement of corporate bonds and debentures.

The funds raised through private placement have increased more than eight times in the last 10 years. In 1995-96, only 73 firms raised a combined Rs 10,035 crore (Rs 100.35 billion).

Ninety-eight companies raised Rs 69,275 crore (Rs 692.75 billion) from overseas issues in 2007-07, compared with Rs 54,118 crore (Rs 541.18 billion) by 134 firms in 2005-06.

Eighty-four companies raised Rs 35,586 crore (Rs 355.86 billion) from equity and convertibles and the remaining Rs 33,689 crore was mobilised through debt issue by 14 companies.