MUMBAI: Indian companies are on a fund raising spree to part finance various growth plans or to reduce earlier high cost debt. Most of the companies that are raising funds include those that had put some of their growth plans after the start of the liquidity crisis.

Indian companies have so far raised $12.3 billion through sale of shares and convertible bonds this year and another $17.4 billion may be raised, according to JP Morgan Chase.

B Hariharan, group finance director, Ballarpur Industries told ET: “This is an opportune time for Indian companies to raise money as it is quite likely that in another six months time interest rates could likely harden and you could see liquidity tightening. At the moment banks have ample liquidity and the cost of borrowing is also down, so this is the right time for companies to raise funds.”

The companies to launch big-ticket issues include Hindalco (Rs 2,900 crore), JSW Steel ($1 billion), India Cements ($100 million), Essar Oil ($2 billion), Tata Steel (Rs 5,000 crore), Jet Airways ($400 million) and Bharat Forge ($150 million).

State-run gas transporter GAIL has said it will raise Rs 500 crore through a bond issue by early December, to part finance its growth plans. Yarn maker JBF Industries too plans to raise Rs 300 crore through qualified institutional placement (QIP) or foreign currency convertible bonds (FCCB) and will hold an extraordinary general meeting to get an approval for the same.

Seshagiri Rao, joint managing director, JSW Steel said: “The general view is that interest rates will harden and as liquidity is available, companies want to utilise this opportunity to raise funds for their growth plans.”

Nearly $9 billion has been raised through qualified institutional placement from April this year. QIP involves selling ordinary rupee denominated equity shares to institutional investors, or the likes of mutual funds, pension funds and insurance companies. These shares are listed on Indian stock exchanges, the NSE and the BSE. Among the fund raising options like share issue, QIP, GDRs, ADRs and FCCBs, QIP scores on low cost, faster time frame and flexibility. It also doesn’t involve procedural requirements such as submission of pre-issue filings to the market regulator.

But the preference for the QIP route is not universal. Firms like Sesa Goa, Sterlite Industries and Welspun Gujarat Stahl Rohren chose to raise funds through convertible bonds rather than QIPs as the former commands a premium, while the latter is often at a discount, said a banker. In the past two months, foreign currency convertible bonds have been gaining popularity. Indian companies have raised around $2 billion in the past two months after a lull of nearly 18 months.

The other popular fund raising route is through issue of American and global depository receipts (ADR/GDR), which represent underlying Indian shares. ADRs are listed on the New York Stock Exchange (NYSE) or the technology-focused Nasdaq, the two main US exchanges, while GDRs are listed on European exchanges.

There are many companies that are keen to tap the primary public market to raise money. This year, Mahindra Holidays and Resorts was the first, when it went public in June, followed by Adani Power.

The fund raising is essentially an indication that the country’s fundamentals are positive and that the large domestic market can fuel growth. The country’s growth estimates of 5-6%, in a scenario of weak growth globally, also encouraged global investors to invest in Indian companies, said head of research of a foreign brokerage, requesting anonymity.