Brushing aside merchant bankers’ apprehension that bunching of non-convertible debenture issues, each seeking to

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raise several hundred crore through public issues, could affect investor response, all of the issues including the big ones have been oversubscribed heavily. This could encourage more NBFCs, which were going slow on debenture offerings, to hit the market before the RBI meets to review the policy rates on September 16.

Muthoot Finance, Manappuram Finance, Shriram City Union Finance, India Infoline Investment Services and Shriram Transport Finance have so far tapped the NCD market to raise debt after banks went slow in lending to the sector. Fund raising through the equity route, too, has dried up following a steep fall in the stock market, which has reduced valuations sharply.

Jagannadham Thunu-guntla, head of research at SMC Global Securities, said: “There will be many more NCD issues. Money is not easily available, equity funding has almost dried up with only small IPOs and no qualified institutional placements (QIPs) or follow-on public offer (FPO) coming.”

“It has turned out to be a tight situation and bank funding has become quite costly. NBFCs no more qualify for priority sector lending facilities from banks. Now they are treated on par with other borrowers,” he said.

Religare Finvest, a wholly owned subsidiary of the BSE-listed Religare Enterprises, has filed a draft red herring prospectus to come out with a Rs 400 crore secured NCD issue with a greenshoe option to raise another Rs 400 crore, aggregating to Rs 800 crore.

The Rs 750 crore NCD issue of India Infoline Investment Services, which closed on August 8, received over 34,000 applications from the public.

“That is a very good response. Debt issues in India generally don’t get that many applications. In earlier times, total number applications crossed the 1,000 mark only in case of a very few debt issues,” Thunug-untla said. A top ICICI Securities official said NCDs were a hit among retail investors, who are apprehensive of equity investments due to high volatility.

“In fact September onwards, there will be several debt issues lined up as infrastructure finance companies such as L&T Finance, IDFC and PFC will line up infrastructure bonds, which offer tax benefits to retail investors,” he said.