Firms Mop Up Rs 24,000 Crore via Non-Convertible Debentures

New Delhi: Indian companies raised more than Rs 24,000 crore through retail issuance of non-convertible debentures (NCDs) in the ongoing fiscal to meet business requirement. This is much higher than Rs 9,713 crore garnered by companies in the entire last fiscal.

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

NCDs are loan-linked bonds that cannot be converted into stock and usually offer higher interest rates than convertible debentures.

As per the latest data with the Securities and Exchange Board of India (Sebi), firms raked in a total of Rs 24,225 crore through NCDs in the current fiscal (2015-16) as on January 15. In terms of numbers, 14 issuance taken the route in the ongoing fiscal as compared to 25 in the entire past financial year.

Experts said sluggish market conditions have forced many companies to opt for NCD route to garner fresh capital.

Individually, National Highways Authority of India, Indian Renewable Energy Development Agency and Indian Railway Finance Corporation raised Rs 10,000 crore, Rs 5,088 crore and Rs 4,532 respectively. These firms raised funds against the base size of Rs 1,000 crore.

NTPC, Rural Electrification Corporation (REC) and Power Finance Corporation (PFC) raked in Rs 700 crore each against a target of Rs 400 crore, Rs 300 crore and Rs 100 crore, respectively.

Besides, Muthoot Finance raised Rs 500 crore against the targeted amount of Rs 250 crore and SREI Equipment Finance mopped up Rs 410 crore compared to the base size of Rs 250 crore.

Further, SREI Infrastructure Finance, Muthoottu Mini Financiers, Muthoot Fincorp and Kosamattam Finance too have taken this route to garner funds.