Fund raising through NCDs drops 63 pc in Apr

As many as two companies raised over Rs 3,200 crore by issuing non-convertible debentures (NCDs) to retail investors in April, to meet their business requirements, a plunge of 63 per cent from the year-ago period.

Moreover, several firms, including JM Financial Credit Solutions and Dewan Housing Finance Corporation have lined up plans to mobilise at least Rs 18,000 crore through the route, according to the data available with Securities and Exchange Board of India (Sebi).

They will raise money after securing Sebi's approval and the funds will be mopped-up to support lending activities along with working capital requirements and for other general corporate purposes.

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

According to the data, two firms -- Muthoot Finance, Kosamattam Finance -- have mopped-up funds totalling Rs 3,214 crore through retail issuance of NCDs in the first month of the ongoing fiscal. In comparison, one firm had mobilised Rs 1,969 crore through NCDs in April last year.

Individually, Muthoot Finance raised a total of Rs 3,000 crore last month through this route against a target of Rs 500 crore and Kosamattam Finance garnered Rs 214 crore against a base size of Rs 150 crore.

In 2017-18, companies had raked in Rs 4,975 crore through NCDs, much lower than Rs 29,558 crore mobilised in the preceding fiscal.