India firms raise $ 4.16 bn in July through ECBs and FCCBs

MUMBAI: India Inc raised over $ 4.16 billion from overseas markets in July through external commercial borrowings ( ECBs) and foreign currency convertible bonds ( FCCBs).

Around 85 companies raised over $ 3.67 billion for various projects through the automatic route, which does not require RBI's or the government approval.

Another $ 492 million were raised through the approval route, according to the RBI data.

Private sector giant Reliance Industries raised $ 1.09 billion through ECBs for refinancing of old loans.

State-run power player NTPC mopped up $ 500 million through ECBs during the month for new investments and Indian Oil Corporation also raised an equal amount for import of capital goods.

Corporates, registered under the Companies Act, 1956, can access ECBs up to $ 500 million in a financial year under the automatic route. The ECB, which is not covered by the automatic route, is considered under the approval route on a case-by-case basis by the RBI.

ECBs are used as an additional source of funding by Indian corporates to augment resources available domestically.

Foreign Currency Convertible Bonds (FCCBs) are also governed by norms similar to ECBs.

Other major fund raised in July using the automatic route came from Bharat Aluminium which raised $ 200 million for new projects, while Mundra Port & Special Economic Zone mopped up $ 150 million for its port project.

Under the approval route in July, telecom firms Vodafone Essar Mobile Services and Vodafone Essar raised $ 200 million and $ 110 million, respectively, for refinancing their rupee loans.