Preferential equity issues at 14-year high

Beats FY13 figure by Rs 10,000 crore

Companies have raised over Rs 51,000 crore through preferential equity issues in the financial year ended March, the highest in 14 years.

The total amount of capital raised through the route was Rs 51,562 crore in FY14 through 174 issues, according to statistics from data provider Prime Database.

This is the highest amount of capital raised by such issues since 2000-2001, the last financial year for which data is available. The money raised in FY14 was greater by nearly Rs 10,000 crore compared to the previous year. Companies raised Rs 41,958 in FY13 which was nearly twice the Rs 22,803 crore in FY12.

This is also significantly higher than the Rs 24,869 crore raised on average in the last ten years through the route.

A preferential issue is a process by which companies raise money through selling shares or convertibles to a select group of investors, rather than to the public at large.

The lowest amount of capital raised through the route in the last fourteen years was in 2003-04, when companies raised a capital of Rs 1,193 crore through 63 issuances. They have raised a total of Rs 2.59 lakh crore through the route in the last 14 years. In comparison, they have raised Rs 3.65 lakh crore through all initial public offers, follow on public offers and offers for sale combined in the same period.