Indian cos raise $2.34 bn in February via ECBs, FCCBs

This is nearly one-third lower than the amount mopped up in the previous month

Indian companies seem to be losing their appetite for foreign funds as they mopped up just $2.34 billion from overseas markets in February, nearly one-third lower than the amount mopped up in the previous month.

The sharp decline in fund raising activities came against the backdrop of uncertain economic conditions and slowing domestic growth.

In January, India Inc raised $3.51 billion through external commercial borrowings and foreign currency convertible bonds.

Of the total 66 companies raising money from overseas market during February, 58 firms raised over $1 billion through the automatic route which does not require approval from the Reserve Bank of India or the government, a RBI data showed.

Besides, 8 companies raised around $1.26 billion through ECB under the approval route.

Country's largest private sector company Reliance Industries raised $800 million to finance its Rupee expenditure, while Power Finance Corporation mopped up $250 million for on-lending or sub-lending.

State-owned NTPC raised $250 million for financing power projects, while IDFC garnered $100 million for sub-lending.

Besides, Gitanjali Gems raised $200 million by way of foreign currency bonds for its new projects.

Most of the developed world, especially the 17-nation euro zone nations, continue to grapple with debt crisis. The gloomy scenario has forced many of these developed countries to embrace easy money (low interest rate) policy, which in turn is considered to be a key factor in fuelling high inflationary trends in emerging markets including India.

To tackle rising inflation, some of the central banks in emerging economies are adopting high interest rate regime that is also making funding costlier compared to the developed world.