Indian companies raised Rs 29,328 crore by issuing non-convertible debentures (NCDs) to retail investors in 2016-17 to meet their business requirements, a plunge of 24 per cent from the preceding year. In 2015-16, they had mobilised Rs 38,812 crore through this route, according to the latest data with the Securities and Exchange Board of India (Sebi).
Overall, in terms of volume, there were 15 NCD issues in the 2016-17 as against 20 in 2015-16. The companies raised money for funding expansion plans, retiring debt, supporting 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. Analysts said fund-raising via NCDs was less compared to the preceding financial year as the companies preferred initial public offerings (IPOs) and QIPs (qualified institutional placement) route to garner funds.
In the gone-by fiscal, Kosammattam Finance went for NCDs thrice to mobilise capital while Dewan Housing Finance Corporation, Muthoot Finance and SREI Infrastructure Finance raised funds twice through this instrument.
Individually, Dewan Housing Finance raised a total of Rs 14,000 crore through this route in the last financial year. Indiabulls Housing Finance mopped up Rs 7,000 crore against a target of Rs 3,500 crore and Reliance Home Finance garnered Rs 3,054 against a base size of Rs 1,000 crore.