Firms double NCDs in FY '14

Firms double NCDs in FY '14

Firms double  NCDs in FY '14

Fund mop-up by Indian companies through retail issues of non-convertible debentures has risen over two-fold so far in the current fiscal to Rs 34,000 crore, primarily to meet working capital requirements.

The amount is expected to further go up in the remaining period of the current financial year. A cumulative amount of Rs 16,982 crore was garnered by 15 firms through their NCDs in 2012-13.

According to the latest data available with Securities and Exchange Board of India (Sebi), 17 companies including India Infrastructure Finance Company, Rural Electrification Corp and NHPC, have collectively raised Rs 34,496 crore via NCDs so far in 2013-14. They had targeted Rs 12,675 crore.

Market analysts believe that companies opted for debt route to raise fresh capital because of lack of options available on the equity side.

Many firms including India Infrastructure Finance Company, Shriram Transport Finance Company and SREI Infrastructure Finance and tapped the NCD route more than once in the current fiscal.Interestingly, all the issues managed to raise more than their targeted amounts.

In 2011-12, the companies had raised Rs 35,611 crore, against their targeted amount of Rs 31,100 crore.

Individually, Indian Railways Finance Corporation raised Rs 4,083 crore in 2013-14.

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