A Study on Preference for Various Modes of Resources Mobilization in Indian Primary Market

Abhigyan, Volume-38, Issue-2, July-September 2020

9 Pages Posted: 3 Feb 2021

See all articles by Ashok Bantwa

Ashok Bantwa

GLS University

Kaushal Bhatt

Gujarat Technological University

Date Written: 2019

Abstract

Companies in India have broad spectrum of choices available for mobilization of financial resources that incudes public issue, right issue, bonus issue and private placement. The present study contains a detailed analysis of amount of funds mobilized through these modes and change in their preference over the study period. We observed a significant surge in preference for debt capital over the equity capital among the Indian corporates. Private placement of debt security has remained the most preferred mode of resource mobilization followed by public issue of bonds and NCDs, IPO and right issue whereas the FPO has remained the least preferred mode of raising fund. Except offer for sale, all three modes of raising equity capital (i.e. IPO, Right issue and QIP) witnessed downward trend in terms of amount raised during study period. Highest amount of resources were mobilized by banking and financial Institution industry followed by power and finance industry.

Keywords: Resources Mobilization, IPO, FPO, Private Placement, Right Issue

JEL Classification: G19

Suggested Citation

Bantwa, Ashok and Bhatt, Kaushal, A Study on Preference for Various Modes of Resources Mobilization in Indian Primary Market (2019). Abhigyan, Volume-38, Issue-2, July-September 2020, Available at SSRN: https://ssrn.com/abstract=3736062

Ashok Bantwa (Contact Author)

GLS University ( email )

Ahmedabad
India

Kaushal Bhatt

Gujarat Technological University

K-6 Circle, E-4 Electronic Estate G.I.D.C, Sector
Chandkheda
Gandhinagar, GA Gujarat 382028
India

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