Fund mop-up via preferential allotment up 50% to Rs 17,000 cr

According to market experts, fund raising through this route is likely to go up further

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Fund-raising by issuance of shares to promoters and shareholders on preferential basis by firms has surged 50 per cent to over Rs 17,000 crore in April-June quarter of the current fiscal.

Market experts say that fund raising through this route is likely to go up further as many companies have lined up plans of mobilising funds on preferential basis.

The funds have been mobilised for expansion plans, refinancing of debt and to meet working capital requirements.

According to the latest data available with markets regulator Securities and Exchange Board of India (Sebi), funds garnered by companies through preferential allotments increased to Rs 17,398 crore in the first quarter of 2015-16 from Rs 11,573 crore in the year-ago period.

However, the number of preferential issues fell to 105 during the period under review from 171 in the April-June quarter of 2014-15.

Experts said a positive outlook for equities and availability of capital have opened this window for the companies to mop up fresh funds through preferential route.