Indian Firms Raise Rs 48,000 Cr via Preferential Allotment in April-February

New Delhi: Indian firms raised a staggering over Rs 48,000 crore through issuing of shares to promoters and shareholders on a preferential basis in the first 11 months of financial year 2015-16 to meet their business requirements.

This was much higher than the Rs 23,260 crore mobilised in the whole of 2014-15.

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

Funds garnered by listed companies through preferential allotment stood at Rs 48,187 crore in April-February of 2015-16, according to the latest data available with the Securities and Exchange Board of India (Sebi).

However, in terms of numbers, total issues fell to 321 from 419 in the entire 2014-15.

Analysts said market volatility has forced many companies to opt for this route to mop up 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 a private placement basis.

Of the total funds raised, the maximum was Rs 16,382 crore in October and the lowest Rs 579 crore in December.