According to latest data of the Securities and Exchange Board of India (SEBI) Indian companies, in 2018, have raised over Rs. 29,300 crores by issuing non-convertible debentures (NCDs) to retail investors in order to meet their business requirements.

The fundraiser through the channel of NCDs witnessed a three-fold jump as compared to the previous year. NCDs are loan-linked bonds that cannot be converted into stocks and usually offer higher interest rates than a convertible.

The SEBI reported that companies collected Rs 29,394 crores through NCD in 2018, as against Rs. 9,779 crore raised from the same route during the previous year.  WGC Wealth Chief Investment Officer Rajesh Cheruvu stated, “Lack of corporate lending appetite by PSU banks combined with attractive yields in the corporate bond markets over bank rates appear to motivate corporates to shift towards market-based borrowing through NCD issuances for raising funds.”

Some of the companies that utilized this route are Muthoot Finance, Kosamattam Finance, JM Financial Credit Solutions, Tata Capital Financial Services, Indiabulls Commercial Credit, Aadhar Housing Finance, Manappuram Finance etc.

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