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Indian firms raised over Rs 24,000 crore through issuance of shares to promoters and shareholders on a preferential basis in the first seven months of the current fiscal, a slump of 34 per cent from the year-ago level.
The funds have been mobilised for business expansion, refinancing debt, working capital requirements and general corporate purposes.
Preferential allotment serves as an alternative mechanism of resource mobilisation, wherein a listed firm issues shares or convertible securities to a select group of shareholders on a private placement basis.
As per the latest data available with the Securities and Exchange Board of India (SEBI), funds garnered by listed companies via preferential allotment stood at Rs 24,433 crore in the April-October period of 2016-17 compared with Rs 37,257 crore in the same period of last fiscal.
In terms of numbers, 256 preferential allotments were made, compared with 211 a year ago.
“The period under review has been pretty much volatile due to various developments both domestically and internationally leading to decline in fund-raising through the preferential route,” ICICI Securities Head Equity Capital Market Pranjal Srivastava said.
Through preferential route, companies had raised Rs 3,829 crore in April, Rs 5,218 crore in May, Rs 2,009 crore in June, Rs 1,470 crore in July, Rs 350 crore in August, Rs 5,718 crore in September and Rs 5,839 crore in October.
In 2015-16, total funds raked in by listed companies via preferential allotment were at Rs 50,513 crore.
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