RBI asks 14 firms for info on end use of funds

The Reserve Bank of India (RBI) has sought information on the end use of funds from 14 companies, including four real estate developers "" DLF Commercial Developers, Marg Constructions, Suryavardhan Estates and Singapore Realty Pvt Ltd "" that raised funds overseas in June, this year.

The four real estate developers raised about $65 million by way of external commercial borrowings (ECBs) and foreign currency convertible bonds (FCCBs) through the automatic route. The 14 companies collectively raised $84 million.

DLF Commercial Developers raised $49.82 million; Marg Constructions $12.50 million; Singapore Realty $ 2.83 million and Suryavardhan Estates $0.5 million for "projects". The instruments used by them to raise funds have maturity between three years and six years and six months.

Releasing the data on ECB/FCCB for June today, the RBI said clarification had been sought from these companies "with regard to conformity to end-use requirement, eligibility of borrowers and other parameters of ECB".

Sanjana Cryogenic Storages, Alpa International, Tozai Exports and Receivables Management Services are some of the other companies that have been asked to explain their end use of funds. Corporate India raised $1.05 billion through ECB and FCCBs in June.

Of the total funds raised, more than 60 companies raised $922.13 million through the automatic route.

Two firms, including the Vijay Mallya-owned Kingfisher Airlines, used ECBs to garner $131.22 million through the approval route.