Indian companies garnered nearly Rs 38,000 crore through issuance of shares to promoters and shareholders on preferential basis in 2016, a plunge of 21 per cent from the previous year.
The funds have been mobilised for business expansion, refinancing debt, working capital requirements and general corporate purposes.
Preferential allotment serves as an alternative mechanism of resource mobilisation, wherein a listed firm issues shares or convertible securities to a select group of shareholders on a private placement basis.
As per the latest data available with the Securities and Exchange Board of India (Sebi), funds raised by listed firms through preferential allotment stood at Rs 37,900 crore for the twelve months of 2016.
In comparison, companies had mopped-up Rs 47,858 crore in 2015.
In terms of numbers, 404 preferential allotments were made in 2016 as compared to 335 in 2015.
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