This Article is From Aug 03, 2016

Firms Mop Up Rs 9,000 Crore Via Preferential Allotment In April-May

Firms Mop Up Rs 9,000 Crore Via Preferential Allotment In April-May
New Delhi: Indian firms raised over Rs 9,000 crore through issuance of shares to promoters and shareholders on a preferential basis during the first two months of the current fiscal year, to meet their business requirements.

This is much lower than Rs 15,892 crore mobilised in the corresponding period of 2015-16.

The funds have been mobilised for business expansion plans, refinancing of debt, working capital requirements and other general corporate purposes.

According to the latest data available with the Securities and Exchange Board of India (Sebi), funds garnered by listed companies through preferential allotment stood at Rs 9,047 crore in the April-May period of 2016-17.

Money raised through such allotment in May stood at Rs 5,218 crore while that in April was at Rs 3,829 crore.

In terms of numbers, 64 preferential allotments were made in May 2016 and 47 during April 2016.

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 a private placement basis.

In the entire fiscal year 2015-16, total funds raised by listed companies through preferential allotment stood at Rs 50,513 crore, the data available with market regulator Sebi.
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