Fifteen years back, a company from a large industrial house raised money by floating corporate bonds at X% interest. A mid-size company raised money at X% plus 200 basis points. It was thus paying 2% more for the capital, putting it at a disadvantage. Today, that large company is raising money at X% – but so is the mid-sized company. The reason: Capital is now more easily available, and the company has also improved its balance sheet. For all mid-caps it is the cost of capital that is key. Now, whether the Nifty moves up or down, the trajectory of interest rates is surely headed south this month.
