Mobilization of funds by Corporate Enterprises in India: An Empirical Study

Abstract

Adequate mobilization of capital needs proper timing, type and method of issue. This is a dire necessity for fulfillment of minimum subscription. Under SEBI guidelines, the securities can be offered for sale in the primary market in different ways. Each method of issue has got its procedure and mechanism.

The objectives of the study are to study mobilization of funds in primary market and provide suggestions based on findings/results. In view of the objectives of the study, exploratory research design has been adopted. The study is based on secondary data covering annual data of mobilization of funds from various categories covering from 1993-94 to 2013-14. This has been collected from official websites of Reserve Bank of India, Securities Exchange Board of India and various other reports like magazines, journals, and published books for the present study. The statistical tools applied for data analysis is descriptive and inferential statistics. E-views are used. Based on objectives, the hypotheses are formed for analysis.

It is concluded that there are compound annual growth rate of 4% in total amount of issues and decline by 12% in total number of issues, concentration of Western and Northern regions largely, mobilization of substantial amount of share of capital from the size of more than Rs. 100 crores, preference of FPOs to IPOs, raising of majority of capital at premium and focusing of manufacturing industries as against service industries. It is suggested that there should be balanced growth among the regions, establishment of separate platform for mobilizing size of capital of less than Rs. 10 crores, encouragement of manufacturing sector for minimum risk through diversified growth and seeking of new avenues of capital carrying lower rate of interest.