US Fed rate hike raises cost of funds for Ambuja Cements bidders

The acquisition is expected to cost around $10 billion (Rs 76,000 crore), including the open offers for the shareholders of both Ambuja Cements and ACC

The US Fed rate hike has sent Ambuja Cements bidders back on the drawing board as their cost of funds is set to rise significantly, said bankers. The cost of funds has risen as high as 13 per cent yearly overseas for the acquisition, they said.

Soon after the surprise rate hike by the Reserve Bank of India (RBI), the US Fed increased its rate by 0.5 per cent last week, thus making costs of funds high for the potential acquirers. Most of the Indian bidders of Ambuja Cements are planning to raise funds from the Middle East-based funds and private