Indian Inc has got approvals to raise $2.82 billion by way of external commercial borrowings (ECBs) and foreign currency convertible bonds (FCCBs) during April 2010. This is almost eight times higher as compared to April 2009 when it was $298 million by way of ECBs and FCCBs.
There were close to 50 companies that received approvals from the RBI to raise these funds. Out of $2.82 billion, the Vodafone Group alone has been given an approval to raise close to $1.48 billion by way of ECBs for the purpose of rupee expenditure with a maturity of six years and six months.
Post the Lehman crises?when the ECB window had dried up?overseas funding had become expensive at LIBOR (base rate) +500 bps. However, with an improvement in the liquidity scenario globally, Indian corporates can now borrow at close to LIBOR+250 bps. In 2009-10, corporates got approvals to raise $21 billion as compared to $18 billion in 2008-09?up by 18%.
In March 2010, corporates have raised $4.32 billion, up by 300% over $ 1.11 billion mobilised in March 2009. A report released by Citi said inflows in March were largely due to borrowing by Reliance Industries andAircel Ltd.