ECBs net inflows rise to $7.9 bn in H1FY25 from $6.8 bn in H1FY24: RBI data

Analysis of the end-use of registrations showed that ECBs for import or local sourcing of capital goods were pegged at $1.3 billion in H1FY25, sharply down from $9.4 billion in H1FY24

The net inflows through External Commercial Borrowings (ECBs) rose to $ 7.9 billion in April-September 2024 (H1Fy25) from $ 6.8 billion in the same period (H1Fy24), according to Reserve Bank of India’s (RBI’s) data.

 

Nearly half of the new ECBs registered during H1Fy25 were intended for capital expenditure including on-lending and sub-lending for capex, the ‘State of Economy’ report in RBI’s November bulletin said.

 

Further analysis of end-use of registrations showed that ECBs for import\local sourcing of capital goods were pegged at $1.3 billion in H1Fy25, sharply down from $9.4 billion in H1Fy24.

 

The modernisation\new project and infrastructure development related ECB intents were $ 5.6 billion as against $ 7.7 billion. The ECB’s for other purposes including working capital and general corporate purpose saw a sharp rise to $ 10.2 billion in H1Fy25 from 4.0 billion in H1Fy24. 

 

The report said New ECB loan registrations ($ 14.3 billion) and disbursements ($ 12.8 billion) were higher during the previous quarter (Q1Fy25) as well as in the corresponding period a year ago (Q2Fy24).

 

In September 2024, the Indian corporates, including non-banking financial companies, had filed ECBs proposals with the RBI to raise $4.84 billion. Out of this, the intent for fund raising through the automatic route amounted to $3.77 billion and that via the approval route was $ 1.06 million.

 

The recent easing of global benchmark interest rates such as the secured overnight financing rate (SOFR) resulted in a decline in the overall cost of ECBs raised during September 2024. The weighted average interest margin (WAIM) over the benchmark rates during H1fy25 was five basis points higher than during H1Fy24.

 

Over three-fourths of registered ECBs during H1Fy25 were effectively hedged in terms of explicit hedging, rupee-denominated loans and loans from foreign parents, which considerably offset the interest and exchange rate sensitivity of such exposures, it added.