Companies double fund raising via NCDs to Rs 43,000 cr in FY14

Tags: Fund, NCDs, Companies
Indian companies more than doubled the amount they raised through non-convertible debentures (NCDs) to almost Rs 43,000 crore in 2013-14, primarily to meet working capital requirements.

A cumulative amount of Rs 16,982 crore had been garnered through 20 issues of NCDs in 2012-13.

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

Most of the funds were raised to support working capital requirements and for other general corporate purposes.

Indian companies collectively raised Rs 42,738 crore via NCDs in the previous financial year through 35 issuances, according to data with the Securities and Exchange Board of India (Sebi). This was more than the Rs 16,150 crore initially targeted.

"Indian debt is costly. Still, companies rushed towards this route for the fund raising activity in 2013-14 as equity was not available and there was lack of confidence among investors," an analyst said.

Firms such as India Infrastructure Finance Company, Shriram Transport Finance Company, India Infoline Finance, SREI Infrastructure Finance and Muthoot Finance tapped the NCD route more than once.

All issues managed to raise more than the targeted amounts. In 2011-12, companies raised Rs 35,611 crore against a target of Rs 31,100 crore.

Indian Railways Finance Corporation raised Rs 4,083 crore in 2013-14, against a target of Rs 1,500 crore, while Power Finance Corporation mopped up Rs 3,876 crore against Rs 750 crore.

The National Highways Authority of India raked in a total of Rs 3,698 crore against a target of Rs 1,000 crore and Rural Electrification Corp raised Rs 3,441 crore, compared with Rs 1,000 crore it sought.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Those willfully defaulting on loans should be blacklisted by Sebi

    As reported by this newspaper’s Monday edition, the Securities and Exchange Board of India (Sebi) has found merit in the Reserve Bank of India’s s

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Arun Kumar Jain

Kickstarting technological innovation

One of the key dimensions of global competitiveness is the ...

Kuruvilla Pandikattu SJ

Developing moral, spiritual capacity

Writing in The Huffington Post, Noam Chomsky, professor emeritus, MIT ...

Gautam Gupta

Manufacturing must keep workers’ welfare in mind

It may be early days yet, but the labour reforms ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture