India Inc, particular infrastructure sector, waiting for the government to announce the second stimulus package, now can expect some good news regarding relaxation of norms for External Commercial Borrowings (ECBs) afterward this month. They may not have to wait for longer, the Finance ministry is reviewing the ECB norms so as to liberalize them and make borrowings from overseas much easier.
present, corporates can bring in up to $500 million through the ECB route. The industry biggies are quite upbeat about yet another easing of ECB norms. The proposed relaxation will be the second in a row within two months.
Norms were relaxed by RBI in October to allow companies in the mining, exploration and refineries sectors to bring in up to $500 million in external commercial borrowing for rupee expenditure. Several corporates like Reliance Industries, Essar Shipping and Jaiprakash Associates have already made the most of the higher borrowing limit since October. The total money borrowed in October this year is $1.12 billion, with Reliance Industries leading the pack with borrowings of $400 million. While Essar Shipping Ports & Logistics borrowed $148 million, Jaiprakash Associates raised $60 million.
However, given the global financial stress, corporates are somewhat concerned about the positive effect of the proposed move. A Subbarao, Group CFO of GMR Group, said, there is no money in the international markets so this will hardly help. Despite liberalisation of the ECB norms, Indian corporates were able to raise just about $1.12 billion from the overseas debt market in October, which is less than half of the amount mopped up in September which was to the tune of $2.8 billion.
present, corporates can bring in up to $500 million through the ECB route. The industry biggies are quite upbeat about yet another easing of ECB norms. The proposed relaxation will be the second in a row within two months.
Norms were relaxed by RBI in October to allow companies in the mining, exploration and refineries sectors to bring in up to $500 million in external commercial borrowing for rupee expenditure. Several corporates like Reliance Industries, Essar Shipping and Jaiprakash Associates have already made the most of the higher borrowing limit since October. The total money borrowed in October this year is $1.12 billion, with Reliance Industries leading the pack with borrowings of $400 million. While Essar Shipping Ports & Logistics borrowed $148 million, Jaiprakash Associates raised $60 million.
However, given the global financial stress, corporates are somewhat concerned about the positive effect of the proposed move. A Subbarao, Group CFO of GMR Group, said, there is no money in the international markets so this will hardly help. Despite liberalisation of the ECB norms, Indian corporates were able to raise just about $1.12 billion from the overseas debt market in October, which is less than half of the amount mopped up in September which was to the tune of $2.8 billion.
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