Reports suggest that more and more companies are raising funds through non-convertible debentures
(NCDs) in order to fund their expansion plan.
NCDs seem to be emerging as a preferred fund-raising option for companies, especially those from NBFC space, reports suggest.
Industry watchers feel that companies prefer to raise funds via NCDs as equity markets have been very volatile in recent times and fund raising through the equity route is becoming difficult.
Power Finance Corp (PFC), Housing and Urban Development Corp (HUDCO), India Infoline Finance, Jagran Prakashan and Thomas Cook have plans to raise collectively Rs 19,155 crore through the NCD route.
Individually, India Infoline plans to raise up to Rs 9,215 crore, while Hudco is looking to mop-up up to Rs 5,000 crore and PFC (up to Rs 4,590 crore).
Additionally, Thomas Cook and Jagran Prakashan have lined up plans to raise Rs 200 crore and Rs 150 crore respectively through NCDs.
Debt instruments, especially NCDs, seemed to be a preferred route for retail investors to park their funds as these are offering higher returns compared to most of the banks providing on fixed deposits, CNI Research Head Kishor Ostwal said. The tenure of the bonds of three NBFC firms would be in the range of 10-15 years.
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