Indian firms raised around Rs 18,600 crore through issuance of shares to promoters and shareholders on preferential basis in the first six months of the current financial year (FY), a slump of 11% from the year-ago level.
The funds have been mobilised for business expansion, refinancing debt, working capital requirements and general corporate purposes.
Preferential allotment serves as an alternative mechanism of resource mobilisation, wherein a listed firm issues shares or convertible securities to a select group of shareholders on a private placement basis.
According to the latest data available with the Securities and Exchange Board of India (Sebi), funds garnered by listed companies via preferential allotment stood at Rs 18,594 crore in the April-September period of 2016-17, compared to Rs 20,874 crore in the same period of the preceding FY.
Through such allotments, companies raised Rs 3,829 crore in April, Rs 5,218 crore in May, Rs 2,009 crore in June and Rs 1,470 crore in July, Rs 350 crore in August and Rs 5,718 crore in September.
In terms of numbers, 211 preferential allotments were made in the first 6 month of the 2016-17 compared to 188 during the same period in the previous FY.
In 2015-16, total funds raked in by listed companies via preferential allotment were at Rs 50,513 crore.