India Inc raised over $1.58 billion from overseas markets in November through external commercial borrowings and foreign currency convertible bonds. Companies had raised $2.47 billion in October through ECBs and FCCBs.
The fall is on account of volatile global conditions,according to experts. Around 75 companies raised around $1.33 billion for various projects through the automatic route in November which does not require approval from the Reserve Bank of India (RBI) or the government.
Another $253 million was raised through the approval route,according to the RBI data. Public sector ONGC Mangalore Petrochem raised $250 million through ECBs for its new projects.
Similarly,Tata Teleservices mopped up $200 million for import of capital goods through ECBs. Infrastructure Development Finance Co raised $100 million for onward or sub-lending. Corporates,registered under the Companies Act,1956,were earlier allowed to access ECBs up to $500 million in a financial year under the automatic route. However,in September,the government raised the limit of external borrowings with tenure of 5 years or more under the automatic route to $750 million.
For the services sector,the ECB limit under the automatic route was doubled to $200 million and for NGOs from $5 million to $10 million.
The ECB,which is not covered by the automatic route,is considered under the approval route on a case-by-case basis by the Reserve Bank.
ECBs are used as an additional source of funding by Indian corporates to augment resources available domestically. FCCBs are also governed by norms similar to ECBs. Other major fund raisers in November included OCL Iron and Steel Ltd which raised $95 million for its rupee expenditure.
Under the approval route in November,Dredging Corporation of India raised over $158 million through ECBs for its port project.