The Indian country is raising funds through retail issuance of non convertible debentures by the Indian companies which has shot up by over three fold to around Rs.34,000 crores for the last financial year amid sluggish equity markets. During the year 2014-2015, the companies have garnered Rs.9,713 crores and most of the funds are mobilized for further expansion to support the working capital requirements.
NCD’s are loan linked bonds which cannot be converted into stock and usually higher rate of interest are offered than debentures. Sources have said that which have come recently that Securities and Exchange Board of India has increased a total of 33,812 crores through the NCD’s last financial year.
Experts have stated that volatile market conditions have forced many companies to choose NCD’s route to garner fresh capital. The BSE Sensex has plunged 9.35% during the period which was under the review.
The National Highways Authority of India has raised Rs.10,000 crores through first tranche against the base size of Rs.1000 crores and it has further mobilized nearly Rs.3,300 crores through second tranche. The National Bank for Agriculture and Rural development has mobilized nearly Rs.3,500 crores and the Indian Renewable Energy has Development Agency has raked Rs. 1,716 crores.
