Mumbai: Corporate India is going slow on dollar borrowings owing to tightening of borrowing norms . External commercial borrowings (ECB) by India Inc have slightly slowed down, in spite of rates in the international market coming down with successive rate cuts by the US Federal Reserve.
Corporates are reluctant to raise foreign currency convertible bonds (FCCB) largely due to the turmoil in the global stock markets. Data indicates that many infrastructure companies have raised overseas money in the recent past. According to the latest figures released by the Reserve Bank of India (RBI), corporates mobilized $5.9 billion through ECBs and FCCBs in the three months, from November 2007 to January 2008. Though the amount is higher than $5.2 billion raised by them in the same period a year ago, it ends up being significantly lower than the $7.4 billion raised in the preceding three months (August-October 2007). The number of companies that have tapped the overseas market too have come down, from an average of 70 to 40-45 in the latest period.
Particularly, infrastructure companies have been big time borrowers this time round. In January this year NTPC was the largest borrower in raising $380 million followed by Delhi International Airport Pvt Ltd which raised $350 million through ECBs. While in December, Reliance Telecom and Shipping Corporation of India were the biggest borrowers brining in $500 million and $340 million respectively through ECBs while GTL Infrastructure raised $300 million through ECBs. In November, two Vodafone-Essar companies raised $359 million. After the imposition of end-use restrictions limiting the rupee expenditure of the borrowing proceeds, most of the companies have borrowed funds only to fund imports of capital goods and equipment or in some cases to fund their overseas acquisitions.
Corporates are reluctant to raise foreign currency convertible bonds (FCCB) largely due to the turmoil in the global stock markets. Data indicates that many infrastructure companies have raised overseas money in the recent past. According to the latest figures released by the Reserve Bank of India (RBI), corporates mobilized $5.9 billion through ECBs and FCCBs in the three months, from November 2007 to January 2008. Though the amount is higher than $5.2 billion raised by them in the same period a year ago, it ends up being significantly lower than the $7.4 billion raised in the preceding three months (August-October 2007). The number of companies that have tapped the overseas market too have come down, from an average of 70 to 40-45 in the latest period.
Particularly, infrastructure companies have been big time borrowers this time round. In January this year NTPC was the largest borrower in raising $380 million followed by Delhi International Airport Pvt Ltd which raised $350 million through ECBs. While in December, Reliance Telecom and Shipping Corporation of India were the biggest borrowers brining in $500 million and $340 million respectively through ECBs while GTL Infrastructure raised $300 million through ECBs. In November, two Vodafone-Essar companies raised $359 million. After the imposition of end-use restrictions limiting the rupee expenditure of the borrowing proceeds, most of the companies have borrowed funds only to fund imports of capital goods and equipment or in some cases to fund their overseas acquisitions.
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