ECB, FCCB volumes fall in August

After crossing the $2-billion mark in July, the amount Indian companies raised through external commercial borrowings (ECBs) and foreign currency convertible bonds (FCCBs) dipped to $1.09 billion (about Rs 5,322 crore) in August.

In August 2008, the month preceding the start of the financial crisis triggered by the collapse of investment bank Lehman Brothers, Indian companies had raised $ 1.6 billion (about Rs 7,032 crore at August 29, 2008, exchange rates) in the overseas markets.

In 2009-10 so far, Indian companies have raised $5.82 billion as against $ 8.13 billion in April-August period last year. The biggest two borrowers were Petronet LNG and Tata Teleservices, which raised $ 300 million each. Apollo Hospitals, which raised $15 million, was the only company to tap the FCCB route.

“Although the ECB market has not seen a full-fledged comeback, the direction is still positive. For high-grade companies and PSU papers, the spreads are narrowing,” said Nishikant Das, director of Debt Capital Markets at Standard Chartered Bank. He added that most of the deals were bilateral or club deals and there were very few syndication deals involving multiple lenders.