Funds raised through ECB fell by 35% year-on-year in the first two months of FY2015

The funds raised by India Inc through external commercial borrowings (ECB) in the first two months of FY20 declined by nearly 35 per cent to $8.296 billion as against $12.847 billion in the year-ago period. This slowdown was probably due to Indian companies putting fund raising plans on hold until there is clarity on the situation on the general elections.

Economists say that now that the NDA has won power for the third time and continuity of economic policy has been ensured, companies are expected to increase funding through the ECB.

Companies that have raised $200 million or more through ECB under the “automatic route” in May 2024 include Ikea India ($574.38 million), Manappuram Finance ($350 million), Pune Data Center II ($303 million), Adani Green Energy Twenty Five(two) are included. tranches of $150 million each, Pune Data Center ($291 million), DC Development Hyderabad ($281 million) and Mahindra & Mahindra Financial Services ($200 million), according to the latest RBI data.

Companies expected to raise $100 million or more under the “automatic route” in May 2024 include Tata Motors Finance ($130 million), Lulu Convention and Exhibition Center ($120 million), Unidad Techno Labs ($108 million), Adani Renewable Energy Forty Five Are included. Piramal Capital & Housing Finance and Bajaj Auto Credit ($100 million each).

approval route

REC raised $300 million through the ECB under the “approval route” in May 2024. ECBs are commercial loans taken by eligible resident entities from recognized non-resident entities. These borrowings must conform to parameters such as minimum maturity, permitted and non-permitted end uses, maximum all-in cost limits, etc.

In April and May 2024, Indian companies raised $4.284 billion ($5.539 billion in April 2023) and $4.012 billion ($7.488 billion), respectively.

Strengthening domestic liquidity in India could encourage more non-bank financial institution (NBFI) issuers to venture offshore, Fitch Ratings said in a recent report. “We expect Indian issuers to opportunistically tap the US dollar market when onshore-offshore rate differentials become favourable,” the agency said.