Rights issues register significant fall

By Our Corporate Reporter

CHENNAI, APRIL 22. Mobilisation of resources through rights issues has recorded a significant fall in 2000-01 according to Mr. Prithvi Haldea of Prime, the premier data base on primary capital market. Only 27 rights issues aggregating Rs. 729 crores were launched. Significantly four of these aggregating Rs. 147 crores failed miserably and the subscriptions had to be refunded. The net mobilisation therefore stood at only Rs. 582 crores through 23 issues, the data on capital market said.

The previous year witnessed mobilisation of Rs. 1,580 crores through 28 issues. In perspective, the mobilisation of 2000-01 worked out to only five per cent of the Rs. 12,630 crores raised in the boom year of 1992-93.

The largest issue during 2000-01 was from Centurion Bank (Rs. 128 crores) followed by Ceat Financial (Rs. 111 crores) and Tata Finance (Rs. 91 crores).

The four issues which had to refund application money were Centurion Bank, Antarctica, Principal Pharmaceuticals and Model Finance. Several other issues failed too but were bailed out by the promoters including Ceat Financial Services and Birla Corporation.

The poor run of rights issues was primarily because of the dull conditions which ran through almost the whole of the year.

The fiscal 2001-02 was likely to start with a bang with the proposed issue of Rs. 1,307 crores from Telco which alone would more than overtake the last year's entire total mobilisation, according to Prime.

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Section  : Business
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