Undeterred by a 10 per cent dip in rights issues mobilisation in 2006-07, India Inc looks all set to raise more than Rs 9,000 crore this fiscal through this route, a new study says.
As many as 24 companies have lined up rights issues to raise Rs 2,344 crore and at least another 50 companies have plans to mop up Rs 7,700 crore on expectations of buoyant secondary market and impending revised SEBI guidelines, according to database firm on primary markets Prime.
Tata Steel, which plans to raise about Rs 3,655 crore, GTL Infrastructure (Rs 1000 crore), Zee Group's Wire and Wireless India (WWIL) (Rs 1,125 crore) and JSW Steel (Rs 400 crore) would tap the rights issue route to raise funds, information available with Prime shows.
"Scores of companies continue to prefer preferential allotments of equity to meet their fund requirement. Several companies have also tapped the overseas market through GDR/ADR /FCCB route (in fiscal 2006-07)," Prime Managing Director Prithvi Haldea said.
Only Rs 3,703 crore was raised through 38 rights issues in 2006, 10 per cent less than Rs 4,126 crore garnered by 36 issues in 2005, Prime said.
Aditya Birla Nuvo was the largest issuer in the year as it raised Rs 779 crore while the other Rs 100 crore-plus issues include Bajaj Auto Finance (Rs 672 crore), Tata Teleservices (Rs 491 crore) and Tata Coffee (Rs 249 crore).
"Right offers are made at a discount to the ruling market price, and hence are able to draw shareholders' response specially when the secondary market is doing well," Haldea said.