Rights issue mobilisation dips 10

The largest issue in the year was from Aditya Birla Nuvo Rs 779 crore. The other Rs 100 crore plus issues were from Bajaj Auto Finance Rs 672 crore, Tata Teleservices Rs 491 crore, Tata Coffee Rs 249 crore, Kirloskar Ferrous Rs 227 crore, Hindustan Oil Exploration Rs 149 crore and Karur Vysya Bank Rs 126 crore.

The response to all issues except one company Vimal Oil was good. Rights offers are made at a discount to the ruling market price and, hence, are able to draw in shareholders8217; response, specially when the secondary market is doing well.

However, according to Haldea, scores of companies continued to prefer to meet their fund requirements through preferential allotments of equity. Several companies also tapped the overseas markets through the GDR/ ADR/ FCCB route. Sebi8217;s restrictive guidelines on rights issues have deterred companies opting for this route. Sebi has decided to rationalise the process.