Cos raise Rs 46,000 cr via preferential allotments in FY16
Indian firms raised a staggering amount of over Rs 46,000 crore through issuance of shares to promoters and shareholders on preferential basis, in the first ten months of the current fiscal, to meet business requirement. This was much higher than Rs 23,260 crore raised in the entire past fiscal. The funds have been mobilised for business expansion plans, refinancing of debt, working capital requirement and other general corporate purposes. As per the latest data available with Securities and Exchange Board of India (Sebi), funds garnered by companies through preferential allotment stood at Rs 46,678 crore during April-January period of 2015-16. However, in terms of numbers, the total issues fell to 293 in April-January period of the current fiscal from 419 in the entire last fiscal. Experts said volatile market conditions have forced many companies to opt for this route to garner fresh capital. Preferential allotment serves as an alternative mechanism of resource mobilisation wherein a listed firm issues shares or convertible securities to a select group of shareholders on private placement basis. Of the total funds mobilised, the maximum was Rs 16,382 crore in October while the lowest was Rs 579 crore in December.