Fund raising via rights issue hits 5-year high of Rs 9,239 crore

New Delhi: Indian firms raised a staggering Rs 9,239 crore through rights issue in the past fiscal, making it the highest fund mobilisation in five years.

The huge fund-raising was primarily driven by Tata Motors' rights issue.

Most of the funds were mopped-up for expansion, repayment of debt and working capital requirements.

In the rights issue mode, shares are issued to existing investors at a pre-determined price, normally at a discount, in proportion to their holdings.

Companies garnered Rs 9,239 crore in the past fiscal, which was 37 per cent higher than Rs 6,750 crore raised in the preceding financial year, according to an analysis.

This was the highest fund-raising since 2010-11 , when firms had raked in Rs 9,594 crore.

In terms of number, the past fiscal witnessed 12 companies using the rights route as compared to 17 firms in 2014-15.

The largest rights issue during the period was from Tata Motors which alone raked in Rs 7,498 crore.

It was followed by IL&FS Transportation (Rs 740 crore), Sun Pharma Advanced (Rs 250 crore) and Fortune Financial Services (Rs 204 crore).