Firms high on foreign funds

Convertible
Bonds Bonds Total 1994-951,976953302,401 1995-9661609701,586 1996-971,4385121,1343,084 1997-9854101,7972,338 1998-9925500255 1999-001,119261001,245 2000-0138900389 2001-0250700507 2002-031541270281 2003-044225835001,505 2004-052101,3185942,122 (till Oct 04)

Source: Prime Database

Shifting focus: Convertible bonds have replaced equity as the instrument of choice
The catalyst: Lower interest rates globally and less documentation required at the time of issue  However, the composition of the instruments being tapped has changed. While equity was the undoubted instrument of choice in the past few years, with the amount raised through equity instruments peaking at $1.119 billion in 1999-2000, convertible bonds seem to be the flavour this year.  Indian companies have raised over $1.31 billion through convertible bonds in the current financial year so far. Incidentally, 23 issues have already hit the overseas market this year against 18 in 1997-98 and 25 in 1996-97.  Merchant bankers said the main reason for the shift from equity issues to convertible bonds was that issuers wanted to lock themselves into the record low interest rates globally this year.