India Inc raises $1.13 bn in Nov through ECBs

India Inc raised nearly $1.13 billion in November this year through external commercial borrowings (ECBs), according to the Reserve Bank of India (RBI) data.

Around 50 companies raised $946,321,713 through the automatic route for various projects, while $182,435,430 was raised by four companies under the approval route.

Delhi-based Bhushan Steel garnered $300 million in ECBs under the automatic route for domestic use (rupee expenditure). Bilt Graphic paper products and Heidelberg Cement India raised $145 million (rupee expenditure) and $125 million (for refinancing old loans), respectively, during the month in ECBs.

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

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

Foreign Currency Convertible Bonds (FCCBs) are also governed by norms similar to ECBs. Companies may also resort to the FCCB route for raising funds.

Another major fund raising under the automatic route was done by The Great Eastern Shipping Co which raised $49 million for import of capital goods.

Under the approval route, L&T Sapura Shipping raised a total of around $141 in two tranches for the import of capital goods.