India Inc raises 15% more funds through rights issues

Indian companies raised Rs 9,594 crore through rights issues in the financial year-ended March 31, a 15 per cent increase from the year-ago period. However, funds mobilised were lower than the Rs 12,622 crore raised in FY09 and much lower than Rs 32,519 crore in FY10, according to Delhi-based Prime Database, which compiles data for the primary market.

As against 29 companies in FY10, 24 firms took the rights issue route in FY11.

The largest rights issues in FY11 came from Central Bank of India (Rs 2,498 crore), Suzlon Energy (Rs 1,308 crore), REI Agro (Rs 1,245 crore) and EIH (Rs 1,179 crore), according to Prime Database.
 

FACTFILE
Year	No. of Rights Issues	Issue Amount (Rs cr)
2001-02	13	1,041
2002-03	12	431
2003-04	22	1,006
2004-05	26	3,616
2005-06	36	4,126
2006-07	38	3,704
2007-08	30	32,519
2008-09	23	12,622
2009-10	29	8,321
2010-11	24	9,594
Source: Prime Database

Nearly 50 per cent of the fund mobilisation, or Rs 4,776 crore, was done by the banks. Besides Central Bank of India, issues were floated by State Bank of Bikaner and Jaipur (Rs 780 crore), State Bank of Mysore (Rs 583), Karur Vysya (Rs 458 crore) and Karnataka Bank (Rs 457 crore).

There are 32 companies which have already applied for or have obtained approval from the Securities and Exchange Board of India (Sebi) for raising Rs 1,781 crore, according to Prime Database. Major ones include Gayatri Projects (Rs 400 crore), JK Paper (Rs 250 crore), Ankit Metal (Rs 175 crore) and Elpro International (Rs 100 crore).

In addition, there were at least 40 other companies which had, in the last six months, announced plans to tap the rights-issue market and might firm up their plans in the near future, Prime Database said.