Fund raising via preferential route down to 11% to Rs18,600 crore

The funds have been mobilised for business expansion, refinancing debt, working capital requirements and general corporate purposes


A file photo of Sebi office in Mumbai. Photo: Aniruddha Chowdhury/Mint
A file photo of Sebi office in Mumbai. Photo: Aniruddha Chowdhury/Mint

New Delhi: Indian firms raised around Rs18,600 crore through issuance of shares to promoters and shareholders on preferential basis in the first six months of the current fiscal, a slump of 11% from year-ago level. The funds have been mobilised for business expansion, refinancing debt, working capital requirements and general corporate purposes.

Preferential allotment serves as an alternative mechanism of resource mobilisation, wherein a listed firm issues shares or convertible securities to a select group of shareholders on a private placement basis.

As per the latest data available with the Securities and Exchange Board of India (Sebi), funds garnered by listed companies via preferential allotment stood at Rs18,594 crore in the April-September period of 2016-17, compared to Rs20,874 crore in the same period of the preceding fiscal.

Through such allotments, companies raised Rs3,829 crore in April, Rs5,218 crore in May, Rs2,009 crore in June and Rs1,470 crore in July, Rs350 crore in August and Rs5,718 crore in September.

In terms of numbers, 211 preferential allotments were made in the first six month of the 2016-17 compared to 188 during the same period in the previous fiscal.

In 2015-16, total funds raked in by listed companies via preferential allotment were at Rs50,513 crore.

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