Buoyed by robust economic growth and an international expansion spree, India Inc's quest for cheaper and quicker global money is growing at an unprecedented pace. | |
| Since 2002, India firms have shown nearly five-fold growth in money raised through external commercial borrowings, American depository receipts and global depository receipts as they raised $16,003 million last year from international markets. |
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| As per a report by The Economist Group, Indian firms are tapping overseas investment funds as they witness lower cost, greater flexibility, speed and depth at the international financial markets. |
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| In the report titled Funding India : Opportunities in international markets, the Economist Intelligence Unit researchers have given a forecast that offshore funding in the country would become more prevalent as it expects India's savings-investment gap to widen in 2007. |
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| In 2005-06, the Indian companies placed ADRs and GDRs worth $2,552 million, which was a four-fold growth compared with $613 million previous year and their total external commercial borrowing stood at $13,451 million, making a total of $16,003 million. |
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| Interestingly, in 2001-02 Indian firm's had raised a total of $3,161. |
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| The report also observed that Indian firms are tolerating exchange-rate risks, which has encouraged use of ECBs over FCCB. |
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| "Moreover, the documentation and regulatory approval processes for overseas financing are often quicker and easier than those to raise funds at home. Indian companies can also increase their "visibility" abroad, a factor that is gaining in importance as they do more business outside the country," it added. |
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