Market experts said fund raising via NCDs has been less, compared to the year-ago period as companies have preferred QIPs and rights issues.
Indian companies have raised close to Rs 7,000 crore via retail issuance of non-convertible debentures (NCDs) in first eight months of the current fiscal, primarily to meet their working capital requirements.
In comparison, firms had collectively raised Rs 15,022 crore via 12 issues in the April-November period of previous fiscal.
Most of the funds have been raised to support working capital requirements and for other general corporate purposes. Firms, including Shriram City Union Finance , Kosamattam Finance, SREI Infrastructure Finance , ECL Finance and Muthoot Finance , collectively raised Rs 6,928 crore via NCDs in the current fiscal through 18 issuances, according to data from Securities and Exchange Board of India (Sebi).
This is more than the initial target of Rs 2,900 crore. Market experts said fund raising via NCDs has been less, compared to the year-ago period as companies have preferred QIPs and rights issues.
Moreover, many companies are looking to raise funds via initial public offers (IPOs) as investor confidence has returned in the equity markets after the formation of a stable government at the Centre.
Individually, Shriram Transport Finance Company raised Rs 1,975 crore against a target of Rs 500 crore; IFCI raked in Rs 1,225 crore against a base size of Rs 250 crore; Muthoot Finance mopped up Rs 466 crore against a target of Rs 250 crore; and ECL Finance garnered Rs 400 crore against Rs 200 crore.
Moreover, SREI Infrastructure Finance, Shriram Transport Finance Company, Kosamattam Finance, Muthoot Finance, Muthoot Fincorp and Muthoottu Mini Financiers tapped the NCD route more than once.
In the previous fiscal, about Rs 42,383 crore was generated through 35 issues of NCDs.
Shriram City stock price
On November 26, 2014, at 15:33 hrs Shriram City Union Finance was quoting at Rs 1700.00, down Rs 47.05, or 2.69 percent. The 52-week high of the share was Rs 1827.80 and the 52-week low was Rs 935.00.
The company’s trailing 12-month (TTM) EPS was at Rs 82.25 per share as per the quarter ended September 2014. The stock’s price-to-earnings (P/E) ratio was 20.67. The latest book value of the company is Rs 440.77 per share. At current value, the price-to-book value of the company is 3.86.