Market blues fail to impact ECB mop-up
Despite a bearish sentiment in global markets, Indian corporates have raised $4.47 billion in March 2008, mostly through external commercial borrowing (ECBs), marginally lower than $5.09 billion raised in March 2007.
By TNN |
MUMBAI: Despite a bearish sentiment in global markets, Indian corporates have raised $4.47 billion in March 2008, mostly through external commercial borrowing (ECBs), marginally lower than $5.09 billion raised in March 2007. India Inc raised a record $30.87 billion during FY08, despite tightening of norms to rein in borrowing in August last year and not so conducive global financial market conditions.
According to the latest figures released by the Reserve Bank of India on Tuesday, approvals for ECBs and
foreign currency convertible bonds (FCCBs) touched $30.87 billion compared to $25.36 billion in the same period, a year ago. There was some slowdown in the past four months, after the government in August put end-use restrictions for overseas borrowings by India Inc under the automatic route.
Most of the borrowings have been predominantly only for import of capital goods and funding overseas acquisitions. Only Dishman Pharmaceuticals and Reliance Communications borrowed for refinancing of old loans.
The data for March indicates that Indian corporates borrowed $4.47 billion through ECBs and FCCBs compared to $5.09 billion in the year ago period. One perceptible feature of the overseas borrowings pattern during the month is virtual drying up of the FCCBs market, with only three companies together raising just about $96 million through this route.
This is largely on account of slowdown in equity markets both at home and abroad, making the conversion rates very unattractive for the issuer. The big-ticket borrowers during the month included oil power and telecom companies. They have been typically top-rated corporates such as Reliance Communications, Reliance Petroleum. Also included in the list were Essar Oil and Adani Power. The Ambani brothers together accounted for almost a third of the overseas borrowings through the automatic route during the month.
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