India Inc raises $1.09 bn in August via ECBs/FCCBs

India Inc raised nearly $1.09 billion overseas during August, 2010 via External Commercial Borrowings (ECBs) and Foreign Currency Convertible Bonds (FCCBs), according to the Reserve Bank data.

Around 50 companies raised $87,44,95,019 through the automatic route for various projects, while $21,49,12,149 was raised by five companies under the approval route.

Essar Shipping Ports & Logistics raised $280 million in under the automatic route for its overseas acquisitions.

Adani Power Ltd raised $175 million in two tranches under the automatic route for its two projects.

ECBs are used as additional source of funding by Indian corporates to build capacity and raise fresh investments to augment the resources available domestically.

Corporates, registered under the Companies Act, 1956, can access ECBs, up to $500 million in a financial year, under the automatic route. The ECB, which is not covered by the automatic route, is considered under the approval route on a case-by-case basis by RBI.

Foreign Currency Convertible Bonds (FCCBs) are also governed by norms similar to ECBs.

Other major raisings in August under the automatic route were done by offshore drilling major Jagson International ($42.3 million, for import of capital goods), pharma firm Teva API ($30.5 million, for modernisation) and Ranbaxy Laboratories ($30 million, for overseas acquisitions).

Under the approval route, Export-Import Bank of India raised $150 million for onward lending. Besides, Damodar Valley Corporation raised $32.7 million, for a power project; while the National Aviation Company of India raised $24 million for import of capital goods.