Companies garner over Rs 8,000 crore via NCDs in FY15 so far

Indian companies have raised more than Rs 8,000 crore via retail issues of non-convertible debentures (NCDs) in the ongoing fiscal so far primarily to meet their working capital requirements.

In comparison, firms had collectively raised Rs 33,460 crore via 24 issues in the April-February period of the previous fiscal.

Most of the funds have been raised to support working capital requirements and for other general corporate purposes.

Firms, including Shriram City Union Finance, Kosamattam Finance, SREI Infrastructure Finance, ECL Finance and Muthoot Finance, collectively raised Rs 8,055 crore via NCDs in the current fiscal (till February 4) through 20 issuances, according to data from Securities and Exchange Board of India (Sebi).

This is more than the initial target of Rs 3,350 crore.
Market experts said fund raising via NCDs has been lower compared to the year-ago period as companies have preferred QIPs and rights issues.

Moreover, many companies are looking to raise funds via initial public offers (IPOs) as investor confidence has returned in the equity markets after the formation of a stable government at the Centre.

Individually, Shriram Transport Finance Company raised Rs 1,975 crore against a target of Rs 500 crore; IFCI raked in Rs 1,209 crore against a base size of Rs 250 crore; Muthoot Finance mopped up Rs 466 crore against a target of Rs 250 crore; and ECL Finance garnered Rs 400 crore against Rs 200 crore.

Moreover, IFCI, SREI Infrastructure Finance, Shriram Transport Finance Company, Kosamattam Finance, Muthoot Finance, Muthoot Fincorp and Muthoottu Mini Financiers tapped the NCD route more than once.

In the previous fiscal, about Rs 42,383 crore was generated through 35 issues of NCDs.