India Inc needs $1.5 billion to refinance debt in 2014, says RBS

Leading British brokerage RBS today said Indian corporates will have to arrange $1.52 billion funds in foreign exchange in the current calendar year to refinance their debt, which will jump to $2.3 billion next year and to $9.1 billion in 2016.

"The high number of callable/maturing dollar bonds in the next five years point to major re-financing opportunities, which we see at $1.52 billion this calendar year, $2.3 billion next year and $9.1 billion in 2016," RBS India and SE Asia Managing Director and head of debt capital markets Manmohan Singh said here.

However, the fresh funds for refinancing will drop to $3.5 billion in 2017 but rise to $8.87 billion the next year and again fall to $7.55 billion in 2019, he said.

On the outlook for fresh fund-raising by domestic corporates, Singh said given the benign interest rate environment in the West, especially in the EU, fund mopping up will take place in the second half of 2014.

He saw significant refinancing transactions from domestic corporates, which will help reduce the overall cost.

"The current negative interest rate regime by ECB will add impetus to issuance volume across the globe," Singh said.

Domestic corporates have raised a little over $10 billion in debt in the first six months of the year, representing 6.9% of the entire debt of $144 billion in Asia, excluding Japan, he said.

The companies that hit the overseas debt market included Bank of Baroda, Bharti, BPCL, Exim Bank, ICICI Bank, IDBI Bank, IRFC and SBI.