Indian companies raised Rs4,975 crore by issuing non-convertible debentures (NCDs) to retail investors in 2017-18, down 83% from the last fiscal year
New Delhi: Indian companies raised Rs4,975 crore by issuing non-convertible debentures (NCDs) to retail investors in 2017-18 to meet their business requirements, a plunge of 83% from the preceding year.
In 2016-17, firms had mobilised Rs29,558 crore through this route, according to latest data with the Securities and Exchange Board of India (Sebi).
Overall, in terms of volume, there were seven NCD issues in the recently-concluded fiscal as against 16 in 2016-17. The companies raised money for funding expansion plans, retiring debt, supporting working capital requirements and other general corporate purposes.
NCDs are loan-linked bonds that cannot be converted into stocks and usually offer higher interest rates than convertible debentures. Market analysts said fund-raising via NCDs was less compared to the preceding financial year as the companies preferred initial public offering (IPO) and qualified institutional placement (QIP) route to garner funds.
Companies mopped-up a record over Rs84,000 crore through IPOs in last fiscal and more than Rs62,000 via QIPs. In the previous fiscal, Kosammattam Finance went for NCDs twice to mobilise capital and raised over Rs443 crore.
Individually, Muthoot Finance raised a total of Rs1,969 crore through this route against a target of Rs200 crore, Mahindra and Mahindra Financial Services garnered Rs1,150 crore against a base size of Rs250 crore.
Besides, Srei Equipment Finance mopped-up Rs562 crore against the base size of Rs500 crore, Edelweiss Retail Finance raked in Rs500 crore as compared to the target of Rs250 crore and Srei Infrastructure Finance garnered Rs351 crore against base amount of Rs200 crore.
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