Indian firms raised $2.36 bn in Sept through ECBs, FCCBs

India Inc raised over $2.36 billion from overseas markets in September through external commercial borrowings (ECBs) and foreign currency convertible bonds (FCCBs).

Around 110 companies raised around $2.11 billion for various projects through the automatic route, which does not require approval from the Reserve Bank of India (RBI) or the government.

Another $252 million were raised through the approval route, according to the RBI data.

Public sector Gujarat State Petroleum Corporation raised $150 million through ECBs for its new projects.

Similarly, Mundra Port & Special Economic Zone mopped up $100 million for its port project through ECBs during the month. Essar Power also raised $100 million.

Corporates, registered under the Companies Act, 1956, were earlier allowed to access ECBs up to $500 million in a financial year under the automatic route. However, in September, the government raised the limit of external borrowings with tenure of 5 years or more under the automatic route to $750 million.

For the services sector, the ECB limit under the automatic route was doubled to $200 million and for NGOs from $5 million to $10 million.

The ECB, which is not covered by the automatic route, is considered under the approval route on a case-by-case basis by the RBI.

ECBs are used as an additional source of funding by Indian corporates to augment resources available domestically.

FCCBs are also governed by norms similar to ECBs'.

Other major fund raisers in September included Infrastructure Development Finance Co which raised $100 million for onward-lending.

Under the approval route in September, Indian Railway Finance Corporation raised $200 million for its rupee expenditure.