Indian companies raised $4.29 billion, through external commercial borrowing (ECB) and foreign currency convertible bonds (FCCB) in October, to fund modernisation, foreign acquisitions, import of capital goods and onward lending.
This is highest since December last year. In December 2011, companies had raised $4.4 billion from the ECBs and FCCBs.
The comparable figure for last month, according to the Reserve Bank of India (RBI) data, was $2.77 billion. Of the total, $2.40 billion was via automatic route, while $1.89 billion was raised through the approval route, which requires case-by-case approval from RBI.
Reliance Industries alone contracted ECB worth $1.5 billion for importing capital goods. The loan tenure is 64 months under the approval route. October saw a number of ECB raised by the government companies. Indian Oil Corporation, Bharat Petroleum, GAIL, Indian Railways Finance Corporation and Air India were the public sector enterprises who had borrowed through ECBs.
There were two FCCB transactions recorded in the month. Jain Irrigation Systems Ltd borrowed $40 million to fund its oversees acquisition while Gujarat NRE Coke Ltd funded its local capital goods expenditure.