Fund raising by issuance of shares to promoters and shareholders on preferential basis has plunged by 34 per cent to Rs 2,159 crore in July as compared to the preceding month.
However, fund raising through preferential allotments is expected to increase in the coming months as many companies have lined up their plans.
According to latest data available with the stock exchanges, funds garnered by companies via preferential allotments declined to Rs 2,159 crore in July from Rs 3,271 crore in June.
Also, the number of preferential issues dropped to 29 in July from 44 in the previous month.
Market analysts said that companies have opted QIP (Qualified Institutional Placement) route to garner fresh capital instead of preferential mode.
The decline in fund-raising in July is coincided with the BSE's benchmark index Sensex climbing two cent during the period.
Overall, fund raising on preferential basis has reached to Rs 13,732 crore in the current financial year (2014-15). In the entire 2013-14 fiscal, companies had mopped up more than Rs 46,000 crore through this route.
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