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Cos raise Rs. 48bn through NCD route

Bank FDs offer a return of about 8.75% for a five-year period, while NCDs of a similar tenure usually offer between 10% and 12% per annum

October 07, 2013 10:10 IST | India Infoline News Service
Indian companies raised around Rs. 48 billion so far this financial year through non-convertible debentures (NCDs) to retail investors, according to the SEBI (Securities and Exchange Board of India) data.

Non-banking financial companies — Srei Infrastructure Finance, Shriram Transport Finance, Rural Electrification Corporation, India Infoline Finance and Muthoot Finance — had launched NCD this year to raise funds.

In 2012-13, 15 companies had raised in nearly Rs. 170 billion via NCDs.

According to market experts, weak equity markets have led companies to opt for the NCD route to raise funds. Retail investors are also attracted to higher returns offered by these NCD issues compared to bank fixed deposits.

Bank FDs offer a return of about 8.75% for a five-year period, while NCDs of a similar tenure usually offer between 10% and 12% per annum.

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