India Inc raises Rs 29,699 cr via rights issue this year

New Delhi (PTI): Amid the dearth of traditional modes of fund ra...
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Zee Business Dec 30, 2008 India Inc Raises Rs 29,699 Cr Via Rights Issue This Year

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"Besides, the clause that in this route if there is any short fall, then promoters have the option to chip in and fill the gap also helped in the rise of number of rights issues in 2008," Nexgen Cap Equity Head Jagannadham Thunuguntla said.

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Zee Business Dec 30, 2008 India Inc Raises Rs 29,699 Cr Via Rights Issue This Year

  1. 1. India Inc raises Rs 29,699 cr via rights issue this year New Delhi (PTI): Amid the dearth of traditional modes of fund raising from the equity as well as debt markets, India Inc resorted to rights issue offerings and raised a whopping Rs 29,699 crore in this year, says a report. quot;So far this year, funds raised through rights issue amounted to Rs 29,699 crore, a surge of a massive 167 per cent from Rs 11,133 crore raised in the corresponding period a year ago,quot; a report by Nexgen Capitals, the merchant banking arm of domestic brokerage firm SMC Global, said. quot;There was a surge in rights issue offerings this year as all kind of fund raising activity failed during this year due to the current market situation. quot;Besides, the clause that in this route if there is any short fall, then promoters have the option to chip in and fill the gap also helped in the rise of number of rights issues in 2008,quot; Nexgen Cap Equity Head Jagannadham Thunuguntla said. In volume terms, however, there was slightly less activity as 26 issues hit the capital market this year against 29 issues in calendar year 2007. The amount of funds in pipeline to be raised through rights issue aggregates to around Rs 3,265 crore wherein seven issues amounting to Rs 1,685 crore has already received the SEBI nod and 17 issues aggregating to around Rs 1,580 crore are awaiting the regulator's green signal, the report added. Rights issue is an offering of common stock to existing shareholders who hold subscription rights or pre- emptive rights that entitle them to buy newly issued shares at a discount from the price at which they will be offered to the public later. This year, other traditional modes of fund raising such as initial public offer, follow-on public offer or qualified institutional placement witnessed significant slump compared to the previous year, the report said. The fund raising spree was hit in this route as well with biggies like Tata Motors Ltd and Hindalco Industries having a tough time to pull them through while wind power major Suzlon Energy suspending its rights issue. There were as many as five big ticket rights issues that were proposed but scrapped their plans due to current market situation. These include Jet Airways India, Union Bank of India, Allahabad Bank, HBL Power Systems and Suzlon Energy. The forthcoming rights issues that have received SEBI approval till December 19 this year but their issue date has not been announced yet include -- Impex Ferro Tech, Shoppers Stop and Thomas Cook. The ongoing rights issues include Dish TV India's Rs 1,140 crore issue and Sumeet Industries Rs 30.18 crore offer.

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