Companies garner Rs 40K cr via NCDs in FY'16

Fund raising via retail issuance of non-convertible debentures (NCDs) by Indian companies has shot up by over 4-fold to Rs 40,000 crore in the current fiscal, ending March 31, as equities remained volatile.
Companies had garnered Rs 9,713 crore last fiscal.
Most of the funds have been mobilised for expansion, to support working capital requirements and other general corporate purposes.
NCDs are loan-linked bonds that cannot be converted into stock and usually offer higher interest rates than convertible debentures.
As per the latest data with Securities and Exchange Board of India (Sebi), firms raked in a total of Rs 40,157 crore through NCDs in the current fiscal (2015-16) as on March 10.

In terms of numbers, 18 issuances have taken the NCD route in the ongoing fiscal as compared to 25 in the entire 2014-15. Some companies have raised funds twice during the current fiscal.

Experts said volatile market conditions have forced many companies to opt for NCD route to garner fresh capital.
Individually, National Highways Authority of India (NHAI) raised Rs 10,000 crore through first tranche against the base size of Rs 1,000 crore, it further raked in Rs 9,152 crore via second tranche. This was mopped-up against the target of Rs 500 crore.
Housing and Urban Development Corporation (HUDCO) mobilised Rs 8,232 crore against the target of Rs 500 crore and Indian Railway Finance Corporation mopped up Rs 4,532 crore against the base size of Rs 1,000 crore. Besides, Indian Renewable Energy Development Agency raked in Rs 1,716 crore against the base size of Rs 1,000 crore.

Further, NTPC, Rural Electrification Corporation (REC) and Power Finance Corporation (PFC), Muthoot Finance, SREI Equipment Finance, SREI Infrastructure Finance, Muthoottu Mini Financiers, Muthoot Fincorp and Kosamattam Finance too have taken this route to garner funds.