Fund-Raising Via NCD Drops 83% To Rs 4,975 Crore In Previous Financial Year

Indian companies raised Rs 4,975 crore by issuing non-convertible debentures to retail investors in 2017-18 to meet their business requirements, a plunge of 83 percent from the preceding year.

In 2016-17, firms had mobilised Rs 29,558 crore through this route, according to latest data with the Securities and Exchange Board of India. In terms of volumes, 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.

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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 route to garnering funds.

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Companies mopped-up a record over Rs 84,000 crore through IPOs in last financial year and more than Rs 62,000 via QIPs.

• In the previous financial year, Kosammattam Finance Ltd. went for NCDs twice to mobilise capital and raised over Rs 443 crore.
• Individually, Muthoot Finance Ltd. raised a total of Rs 1,969 crore through this route against a target of Rs 200 crore.
• Mahindra & Mahindra Financial Services Ltd. garnered Rs 1,150 crore against a base size of Rs 250 crore.
• SREI Equipment Finance mopped-up Rs 562 crore against the base size of Rs 500 crore.
• Edelweiss Retail Finance raked in Rs 500 crore as compared to the target of Rs 250 crore.
• SREI Infrastructure Finance Ltd. garnered Rs 351 crore against a base amount of Rs 200 crore.

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