These high yielding bonds, which is a euphemism for sub-investment grade or junk bonds were sold at coupon rates ranging from 4.125 per cent (Motherson Sumi Systems) to 8.785 per cent (Rolta).
Yet these companies can save around two to three percentage points on interest cost, while an investment grade company can gain up to 6 per cent on interest, making forex debt raising an attractive proposition for domestic firms which have to pay around 12 per cent to 15 per cent in the domestic market, according to investment bankers.
In the bond market parlance, 'B-' or 'BB' rated bonds are referred to as "junk bonds" or sub-investment grade debt, and normally attract higher premium or high coupon rates. The coupon rate is the yield that the bond would pay on maturity.
Most of these bonds are rated sub-investment grade by the global rating agency Fitch.
The chart is led by Tata Steel which sold USD 1.5 billion worth of bonds to overseas investors in a dual tranche deal late last month, making its debut US dollar bond sale. According to data collated by Deutsche Bank India, the demand for high yielding bonds from the country is rising.
"There is huge optimism about the country, and a confluence of liquidity, low rates and tight credit spreads presents an unprecedented opportunity for India Incorporated," Deutsche Bank India's Head of Corporate Finance Amit Bordia said.
The biggest deals came last month, when on a single day (July 24), Tata Steel, GreenKo, and Global Cloud Xchange, together raised over USD 2.4 billion.
This year alone, seven sub-investment grade companies raised funds abroad worth USD 3.78 billion, signalling rising investor appetite for Indian paper, Deutsche Bank India said.
While the Tata Steel issue was priced at 4.85 per cent coupon rate for 5.5-year money, the 10-year issue was sold at a coupon rate of 5.95 per cent. The second biggest junk bond sale came from auto-component maker Motherson Sumi Systems which sold Euro bonds worth USD 682 million late June at 4.125 per cent.
The third biggest issue came from the Hyderabad-based renewable energy producer GreenKo which raised USD 550 million late July at 8 per cent for five-year money.
Global Cloud Xchange, earlier known as Reliance Globalcom, raised USD 350 million issuing 5-year tenure bonds at a coupon of 7 per cent.
IL&FS arm ITNL Offshore sold bonds worth USD 93 million early July in the Chinese market at an 8 per cent coupon rate, while Tata Motors sold dollar bonds worth USD 300 million in April at a coupon rate of 5.53 per cent for five-year money.
Rolta India's USD 300 million five-year bonds was the highest yielding at 8.875 per cent, issued in early July.
This fiscal, corporates have so far raised USD 14.7 billion worth forex debt in various currencies, indicating that overseas bond sales are on course to set new records, after a 60 per cent spike in 2013 at over USD 16.5 billion over 2012 with Bharti Airtel, ONGC Videsh and SBI hitting overseas bond markets with USD 1-billion-plus issues.
So far, 15 companies hit the market 28 times this year raising USD 14.7 billion, according Deutsche Bank India data.
Merchant bankers are also very bullish about a hefty fee income, as they see this year to be on course to set a new record, thanks to high domestic interest rates and a low interest regime overseas, along with with a revival of sentiment in the country after the elections.
On an average, companies gain an interest arbitrage of around 500 basis points to 600 basis points by raising funds overseas, merchant bankers said.
This spike in international debt raising is happening despite Reserve Bank of India putting breaks on going to the External Commericial Borrowings route in an unbridled manner.
Leading the pack this year is Bharti Airtel, which since January mopped up USD 2.4 billion in four issuances, followed by energy major ONGC Videsh selling bonds worth USD 2.23 billion to pay back the bridge loan it had taken to buy a 10 per cent stake in a Mozambique oil block.