India's Largest Database on New Projects
Overseas borrowings rise to thirty per cent in April-Aug
29 September 2010: The low interest rates prevailing overseas has helped the Indian companies to raise 30 per cent more resources through the external commercial borrowing (ECB) route in the first five months of the current financial year compared to 2009.
The resources garnered during the reporting period aggregated to $7.559 billion compared with $5.816 billion in the corresponding period last year. Interest rate arbitrage of 100-150 basis points between rupee and foreign currency loans is spurring India Inc to tap the overseas market, according to sources.
According to the Reserve Bank of India data, in August 2010, India Inc raised $1.089 billion against $1.164 billion in the previous month. Companies that raised resources through the ECB (automatic) route include Essar Shipping Ports & Logistics Ltd ($280 million loan for seven years and one month for making acquisitions overseas) and Adani Power ($100 million loan of 5 years and 1 month duration and $75 million loan of 6 years and 5 months duration).
Source: Hindu Business Line