Ntpc, Hdfc Foreign Floats To Sail Through
The external commercial borrowing (ECB) programmes of National Thermal Power Corporation (NTPC) and Housing Development Finance Corporation (HDFC) aggregating $220 million are expected to sail through without any hiccups despite S&P revising downwards the sovereign credit rating outlook on India to negative.
"We are not seeing any resistance to Indian papers being hawked now," said a merchant banker.
Power utility NTPC is raising $120 million via the ECB route at 48 basis points over the London Inter Bank Offered Rate (LIBOR). NTPC's ECB programme has a maturity period of 2.5 years.
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HDFC, which has a $5.93 million net foreign currency exposure in as on March 31, has drawn up plans to raise $100 million through ECB.
Details of the tenor of the ECB and the coupon rate are being worked out by State Bank of India, the sole arranger to the issue.
Reliance Petroleum was the last Indian corporate to raise foreign currency through the ECB route. It has recently raised $250 million.
Earlier in the fiscal there were a spate of ECB issues in the market. Larsen & Toubro, ICICI, Tata Steel, Reliance Petroleum and NTPC were the major corporates who have accessed the market.
The total amount raised by the corporates was to the tune of $850 million. The mad rush for forex resource raising was to beat the May 31 deadline after which the ECBs is subjected to withholding tax. However, this was not applicable for housing finance companies.