Around 8 firms took the route of retail issuance of non-convertible debentures (NCDs) in the first ten months starting from April till January, a period of ongoing fiscal deficit. They had to choose this means in order to be able to meet their various business needs. In the FY 2019-20, from the months of April till January, the firms that followed this route managed to garner around Rs 14,161 crore. A major portion of these funds have been mobilized to support the lending activities and at the same time to meet the working capital requirements and other general corporate purposes. The Non-Convertible Debentures (NCDs) are generally loan-linked bonds that cannot be converted into stocks and they usually offer higher interest rates as compared to debentures that are convertible.
The most recent data collection made and available in the hands of market regulator namely SEBI, a total of at least eight companies who were involved in pursuance of a similar route of public issuance managed to collect funds totaling up to Rs 9118crore through their retail-based issuance of Non-convertible Debentures in the fiscal period that lasts till the end of January 2021. Some of the greatest entities that have raised funds in this manner are Muthoot Finance, Muthoot Mini Financiers, KLM Axiva Fin vest, Sakthi finance, Edelweiss Financial Services, Kosamattam Finance, and Power Finance Corporation. When we consider numbers, a total of 14 issuers were seen to have taken this aforementioned route in the FY 2020-21 in the April-January period as compared to 30 in the year-ago period. If we see individual collections, Power Finance Corp has alone raised Rs 4,429 crores in the current fiscal. It has been able to collect Rs, 4,429 crores against the minimum set target of Rs 500 crore.
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