Fund collected through NCDs doubles at Rs 34k cr
Fund collected by Indian companies through retail issues of non-convertible debentures has increased over two times during current financial year. A collective amount of Rs 16,982 crore was gathered by 15 firms through their NCDs in the entire 2012-13 fiscal. NCDs are loan-linked bonds which are issued by a company that cannot be changed in to stocks and are mainly offers higher interest rate than convertible debentures.
As per the current data available with Securities and Exchange Board of India (Sebi), 17 firms such as India Infrastructure Finance Company, Rural Electrification Corp and NHPC have collectively gathered Rs 34,496 crore via NCDs so far in 2013-14. Whereas they targeted to collect Rs 12,675 crore.
Market analysts accept that companies opted for debt route to collect money because of lack of options available on the equity side. Firms such as India Infrastructure Finance Company, Shriram Transport Finance Company, India Infoline Finance, SREI Infrastructure Finance and Muthoot Finance utilized the NCD route more than once in the current fiscal. All this is done to gather more amount than the targeted amount. During 2011-12, the companies had collected Rs 35,611 crore, while their targeted amount is Rs 31,100 crore.
Indian Railways Finance Corporation collected Rs 4,083 crore single handedly in 2013-14, against its target of Rs 1,500 crore, on other hand Power Finance Corporation collected Rs 3,876 crore, as against the target of Rs 750 crore. Except this, National Highway Authority of India (NHAI) raked in a total of Rs 3,698 crore, while its target is to collect Rs 1,000 crore and REC collect Rs 3,441 crore, while it is aiming to gather Rs 1,000 crore.
Source: mydigitalfc.com
India Infoline Finance, India Infrastructure Finance Company, Indian Railways Finance Corporation, Muthoot Finance, National Highway Authority of India, ncd, NHAI, NHPC, Non-Convertible Debentures, Power Finance Corporation, REC, Rural Electrification Corp, SEBI, Securities and Exchange Board of India, Shriram Transport Finance Company, SREI Infrastructure Finance
