India Inc mops up $22 bn from syndicated loans

Global meltdown seems to have had no impact on India Inc’s fund raising as corporates, led by Tata Motors’ $3 billion credit for JLR, have mobilised $22.3 billion (around Rs 88,000 crore) in loans so far this year, up 18 per cent from the same period last year, said Dealogic.

“Syndicated lending to Indian borrowers has bucked global trends by going up by 18 per cent compared to the credit in the same period in 2007,” global consultancy firm Dealogic said. India Inc through five deals has garnered $22.3 billion against $18.9 billion in the year-ago period, it added.

 

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• The average loan size in India grew by 63 per cent to $406 million during 2008 from $248 million last year
• Tata Motors’ $3 billion facility to finance the acquisition of Jaguar and Land Rover is the largest Indian loan so far in 2008
• Reliance Power, which hit the capital market early this year, has raised $3 billion through the largest ever IPO in India

 

“Tata Motors’ $3 billion facility to finance the acquisition of Jaguar and Land Rover is the largest Indian loan so far in 2008, and is the third largest Indian loan on record,” Dealogic added.

However, Reliance Power’s $2.5 billion facility announced last week to fund a coal-fired power plant is India’s largest rupee-denominated loan on record. The Anil Ambani group firm, which hit the capital market early this year, has raised $3 billion through the largest ever IPO in India.

The average loan size in India grew by 63 per cent to $406 million during 2008 from $248 million last year. In the first half of 2008, corporates had mobilised $21.9 billion, a 60 per cent increase the same period in 2007.

The boom in the power sector in the country was well reflected in the borrowing data with the utility and energy sector accounting for 22 per cent of Indian loans this year.

Domestic financing major SBI Capital Markets topped the chart of book runners, with 51 per cent market share mobilising 20 deals so far.

Syndicated loan refers to a large sum of funds provided by a group of banks collectively to a borrower. There is usually one lead bank that takes a percentage of the loan and syndicates the rest to other banks.

A reverse trend was, however, witnessed in the fund mobilisation of emerging economies, where the syndicated loan volume dropped 22 per cent to $28.1 billion in the first half of 2008.

In the list of emerging market economies in terms of loan volume, India is ranked third after Russia and Singapore.

In the emerging economies, the finance sector attracted loans worth $39.9 billion so far this year, a 28 per cent decline compared to $55.1 billion in 2007. Utility and energy sector accounted for loan worth $35.5 billion.