As many as 10 companies raised a little over Rs 290 billion through the issuance of debentures during April-September period of 2018-19, registering a surge of more than seven times from the year-ago period.
The funds have been mobilised for business expansion, supporting working capital requirements and other general corporate purposes.
According to the latest data with regulator Securities and Exchange Board of India (Sebi), a total of 10 companies together mopped up Rs 290.13 billion through retail issuance of non-convertible debentures (NCDs) in the first six months of the current financial year (2018-19).
These companies are Kosamattam Finance, Muthoot Finance, Srei Equipment Finance, Dewan Housing Finance Corp, JM Financial Credit Solutions, Shriram Transport Finance Company, ECL Finance, Indiabulls Commercial Credit, Tata Capital Financial Services and Aadhar Housing Finance.
Kosamattam Finance has taken the route twice to garner funds.
In comparison, four companies collected Rs 38.96 billion through this route in the same period of 2017-18. Overall, firms accumulated about Rs 49.50 billion in the entire preceding financial year.
Muted demand for qualified institutional placements (QIPs), lukewarm secondary market and apprehension over a sustained rise in interest rates attracted companies towards the debentures, market experts said.
Moreover, several firms have announced plans to raise funds through NCDs, which are loan-linked bonds that cannot be converted into stocks and usually offer higher interest rates than the convertible debentures.
Individually, Dewan Housing raised Rs 109.45 billion in the period under review as against a target of Rs 30 billion, Shriram Transport garnered Rs 36.48 billion against a target of Rs 10 billion and Tata Capital Financial Services raked in Rs 34.33 billion against a base size of Rs 20 billion.
Besides, Indiabulls Commercial collected Rs 31.01 billion as against a target of Rs 10 billion and Muthoot Finance mopped up Rs 30 billion against a base size of Rs 5 billion.