Fund raising via retail NCDs slumps 85% to Rs 600 cr

Fund raising by Indian companies through retail issuance of non-convertible debentures (NCDs) plunged by 85 per cent to around Rs 600 crore in the first four months of the current fiscal, from the year-ago level.
Two companies - SREI Equipment Finance and SREI Infrastructure Finance - have raised Rs 577 crore through NCDs during the April-July period of 2015-16, to support working capital requirements and general corporate purposes.
In comparison, Rs 3,760 was garnered via nine such issuances in the year-ago period, as per the latest data with the Securities and Exchange Board of India (Sebi).
In the entire last fiscal (2014-15), Rs 9,713 crore had been garnered through 25 issues of NCDs.

SREI Equipment Finance raked in Rs 410 crore against a target of Rs 250 crore, SREI Infrastructure Finance mopped-up Rs 167 crore against the 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.
Companies including Jet Airways and DLF have lined-up plans to raise about Rs 20,000 crore through this route. However, most of these funds would be garnered via private placement basis rather than retail issuance.
Experts said that mobilising money through private placement is being viewed as a safer bet instead of opting for retail issuance.