Companies garner Rs 5,500 crore via NCDs in Apr-Oct

Indian companies have garnered about Rs 5,500 crore through retail issues of non-convertible debentures (NCDs) in the first seven months of the ongoing fiscal, with REC contributing the most to the fund raising.

The funds have been raised for business expansion plans, support working capital requirements and for other general corporate purposes.

Eight firms -- Rural Electrification Corporation (REC), Power Finance Corporation (PFC), NTPC, Muthoot Finance, SREI Equipment Finance, Muthoot Fincorp, Muthoottu Mini Financiers, and SREI Infrastructure Finance -- have collectively mobilised Rs 5,457 crore through NCDs during April-October period of 2015-16, as per the latest data available with Sebi.

In comparison, firms had mopped up Rs 9,713 crore in the entire last fiscal (2014-15) through 25 issuance.

All the eight firms have raised more than the targetted amount, barring SREI Infrastructure Finance, which mopped up Rs 163 crore against a base size of Rs 100 crore.

NCDs are loan-linked bonds that can not be converted into stock and usually offer higher interest rates than convertible debentures.

Many companies have lined up plans to raise about Rs 20,000 crore through this route. However, most of these funds would be garnered through private placement basis rather than retail issuance.

During the current fiscal, REC mobilised a staggering Rs 2,428 crore against the base size of Rs 300 crore, NTPC and PFC raked in Rs 700 crore each against the target of Rs 400 crore and Rs 100 crore, respectively.

Muthoot Finance garnered Rs 500 crore as compared to the base size of Rs 250 crore, SREI Equipment Finance raised Rs 410 crore against a target of Rs 250 crore, Muthoot Fincorp raked in Rs 327 crore against a target of Rs 150 crore and Muthoottu Mini Financiers mopped up Rs 228 crore against the base size of Rs 125 crore.