NCDs lose ground, funds at 6-year low in FY15

Fund raising through retail issuance of non-convertible debentures (NCDs) came in at Rs 9,422 crore for 2014-15, a 6-year low.
But the amount overshot the initial target of Rs 4,075 crore.
According to data available with the Securities and Exchange Board of India (Sebi), the funds mobilisation came in way below the Rs 42,383 crore mopped up in the preceding fiscal.
This was the lowest amount since 2008-09 when firms had raked in Rs 1,500 crore through the NCD route. Data on NCD are not available on Sebi's website prior to this period.
Experts said fund raising via this tool has lost some of its sheen as companies have gone for QIPs and rights issues to garner capital.

In terms of numbers, fresh capital was raised through 24 issues in the past financial year compared with 35 in 2013-14.

Most funds were raised 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.
Individually, Shriram Transport Finance Company raised Rs 1,975 crore against a target of Rs 500 crore; IFCI Rs 1,209 crore as against a base size of Rs 250 crore; ECL Finance Rs 789 crore against a target of Rs 400 crore and IFCI about Rs 763 crore as against Rs 250 crore.

Moreover, SREI Infrastructure Finance, Shriram Transport Finance Company, Kosamattam Finance, Muthoot Finance, Muthoot Fincorp, Muthoottu Mini Financiers and ECL Finance tapped the NCD route more than once.