Indian fund raising and M and A volumes tumbled in the March quarter, with the value of IPOs falling more than 99 percent from year ago as the global crisis bit, and bankers expect muted activity for the rest of 2009.

Debt volumes held up better as cash-starved firms had few other avenues to raise funds and bond rates were below bank loan rates.

In the March quarter there was just one initial public offering which raised $4.9 million — about one-tenth of a percent of the $3.7 billion raised a year earlier and the lowest since the December quarter of 2001, Thomson Reuters data showed.

“Risk appetite is very low, hurting volumes. Debt has the flavour as investors feel comforted by the assured return,” said Rashesh Shah, chief executive at Edelweiss Capital.

“Equity raising leans on corporate earnings growth, and we hope activity will begin to pick up in the last quarter of the year when the worst should be hopefully behind us.

M and A volumes fell 73 percent to $4.9 billion. In March, top listed firm Reliance Industries said it would absorb its Reliance Petroleum unit through a share offer worth $1.7 billion.

Debt deals slid by a quarter to $5.6 billion, despite heavy bond issuances by banks and corporates, the data showed. Top bank State Bank of India raised 40 billion rupees ($790 million) in bonds during the quarter.

The poor start to 2009 follows a weak 2008. The benchmark stock index slid 52.5 percent in 2008, its biggest fall ever, M and A volumes fell 24 percent and share sales tumbled 80 percent to their lowest since 2003, Thomson Reuters data showed.

The worst financial crisis in 80 years has crippled funding and hurt deal volumes globally. Worldwide equity volumes fell by nearly half to $69.6 billion, the lowest start since 2003.

Asian M and A fell 44 percent to $67.5 billion in the quarter, the lowest since the third quarter of 2006, the data showed.