TSE News - Financing Activities By Tehran Stock Exchange's Listed Companies

Tehran Stock Exchange’s Issuers Department Director, Mr. Rouhollah Hosseini Moghaddam made the following statement regarding the financing activities at TSE. 

Financing through capital market of Iran is growing due to introducing new financial instruments, especially the Islamic instruments like Sukuk and Murabaha. At the present, companies can finance their projects easier than before.

Raising capital, companies can develop their business without having to finance just from the traditional resources. Thus, it will help diversify their capital funds. New capital may be spent on research and development of new products or services, renovation of physical plants, new constructions and dozens of other programs to develop the business and improve profitability. On the other hand, easily financing through issuing different types of securities is one of the most important advantages of capital markets. Studies indicate that multinational companies have grown through capital markets and may expand their activities in a global market.

Based on the latest published information by SEO (Securitas and Exchanges Organization of Iran) 48 listed companies at TSE raised more than IRR 52516 billion capital in the recent 6 months. According to the statistics, 76 percent of the capital has been raised through issuing rights, 12.5 percent from retained earnings, and 1.5 percent from other reserves. 24 companies out of the above mentioned ones raised their paid capital to expand the production capacity, complete the development program, and purchase new production equipment. 15 companies raised capital for improving their capital structure and 4 of them raised capital for avoiding bankruptcy based on the article of 141 of Iran Business Law. (If the accumulated loss reaches more than half of the paid capital, the company will go bankrupt).

 In this period, two TSE’s listed companies also issued Sukuk Ijarah, by worth of IRR 1267 billion at the annual rate of 20 percent and 4-year maturity. Naft e Pars issued Ijarah for buying new equipments and Rayan Saipa (a leasing company) issued this financial instrument for buying the new office building.

Also, a listed pharmaceutical company has received the permission to issue IRR 200 billion participation bonds at the rate of 10 percent. It is expected that the issuing permit of 6 other companies for more than IRR 10000 billion of Sukuk and participation bonds will be received up to end of the year.

(1USD = 24500 IRR)