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As many as six companies raised over Rs 19,000 crore through issuance of debentures during April-July period of the ongoing fiscal, a surge of five times from the year-ago period.
The funds have been mobilised for business expansion, supporting working capital requirements and other general corporate purposes.
As per latest data with SEBI, Kosamattam Finance, Muthoot Finance, Srei Equipment Finance, Dewan Housing Finance Corp, JM Financial Credit Solutions and Shriram Transport Finance Company together mopped up Rs 19,067 crore through retail issuance of non-convertible debentures (NCDs) during the period.
This was in comparison to Rs 3,681 crore raised by three companies in the same period of 2017-18. Overall, firms had garnered about Rs 4,950 crore in the entire preceding fiscal.
Muted demand for qualified institutional placements (QIPs), lukewarm secondary market and apprehension over a sustained rise in interest rates attracted companies towards debentures, market experts said.
Moreover, over a dozen firms have announced plans to raise funds through NCDs, which are loan-linked bonds that cannot be converted into stocks and usually offer higher interest rates than convertible debentures.
Individually, Dewan Housing raised Rs 10,945 crore in the period under review as against a target of Rs 3,000 crore, Shriram Transport garnered Rs 3,648 crore against a target of Rs 1,000 crore and Muthoot Finance raked in Rs 3,000 crore against a base size of Rs 500 crore.
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