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INDIA BUSINESS WORLD - August 1st - August 31st - 2008
INDIA INC RAISES ECBS WORTH $2.5 B IN JULY
India Inc has raised a total of $2.5 billion in July this year by way of borrowings from the international markets. However, borrowings from the automatic route have almost dried up with most of the funds being raised from the approval route.
The borrowings in July 2008 were dominated by one company —Coastal Gujarat Power, which accounted for more than half of the money raised. The company raised a total of $1.72 billion through five loans for periods ranging from 18-20 years. The company has borrowed the entire amount for the import of capital goods.
Overseas borrowings through the approval route touched $2.1 billion. While they have borrowed $386 million through the automatic route, taking the total overseas borrowings for the month to $2.5 billion by 40 entities, according to the overseas borrowings or the external commercial borrowings (ECB) data for July 2008 released by RBI. In comparison, corporates raised $3.3 billion through the ECB as the FCCB route in the same period a year ago.
Interestingly, corporates have almost stopped raising funds through FCCBs route these days as the stock markets have fallen steeply. As a result, the prices are not very attractive when the bonds are converted into equity.
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