Fund raising via preferential allotment hit a 13 month high

Fund-raising by issuance of shares to promoters and shareholders on preferential basis has hit a 13 months high of Rs 11,878 crore in June.

 

According to the latest data released by the Securities and Exchange Board of India (Sebi), companies raised Rs 11,878 crore through preferential allotments in June.

 

The June figure has reached the highest level since May 2012, when the funds had mopped-up a total of Rs 14,987 crore via preferential allotments route.

 

However, the number of preferential issues fallen to 33 in June from 56 in the preceding month.

 

With the latest capital mop-up, the cumulative mobilised amount through preferential allotment route stood at Rs 27,893 crore through 126 issuance for the financial year 2013-14 so far.

 

"There were 33 preferential allotments (Rs 11,878 crore) listed at BSE and NSE during June 2013 as compared to 56 preferential allotments ( Rs 4,170 crore) in May 2013, Sebi said.

 

Market participants said capital raised through the preferential allotments of shares have surged in June amid a slump in the secondary market but the number of companies that opted for the route has gone down.

 

The decline in fund raising is coincident with BSE's barometer index Sensex surging 364 points, or 1.84%, in June.

 

In the entire financial year 2012-13, companies have garnered around Rs 47,000 crore, marking a sharp rise from Rs 25,709 crore garnered through preferential allotments to the promoters as well as shareholders in the past fiscal.

 

In 2010-11, companies had collected Rs 30,511 crore through preferential allotments.