INSUBCONTINENT EXCLUSIVE:
Indian companies raised over Rs 29,300 crore by issuing non-convertible debentures (NCDs) to retail investors in 2018 to meet their business
requirements, representing a three-fold surge compare to preceding year.
NCDs are loan-linked bonds that cannot be converted into stocks and
usually offer higher interest rates than convertible.
According to latest data with Securities and Exchange Board of India (Sebi), companies
mobilised Rs 29,394 crore through NCD in 2018, much higher than Rs 9,779 crore raised from this route last year.
"Lack of corporate lending
appetite by PSU banks combined with attractive yields in corporate bond markets over bank rates appear to motivate corporates to shift
towards market based borrowing through NCD issuances for raising funds," WGC Wealth Chief Investment Officer Rajesh Cheruvu said.
The
companies raised money for funding expansion plans, retiring debt, supporting working capital requirements and other general corporate
purposes.
Firms that tapped NCD route this year are Muthoot Finance, Kosamattam 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, Aadhar Housing Finance, Manappuram Finance and KLM Axiva Finvest.
Kosamattam Finance, Shriram Transport Finance Company and JM
Financial Credit Solutions have taken this route twice to garner funds.
Individually, Dewan Housing raised Rs 10,945 crore in period under
review as against a target of Rs 3,000 crore and Tata Capital Financial Services raked in Rs 3,373 crore against a base size of Rs 2,000
