With domestic companies not going for big-ticket overseas acquisitions, outward foreign direct investment (FDI) grew 5.4 per cent to $3.13 billion during the second quarter of the current financial year, as against $2.97 billion in the corresponding period last year.
According to data on FDI in overseas joint ventures (JVs) and wholly-owned subsidiaries (WOSs) released by the Reserve Bank of India, about 1,180 proposals amounting to $5.62 billion were cleared for investment abroad in JVs and WOSs during the quarter as against 452 proposals amounting to $4,23 billion during July-September 2007.
During the period, the share of equity in total investment proposals declined, while those of loans and guarantees showed an increase.
Equity accounted for 51.6 per cent of the investments, followed by loans (29.1 per cent) and guarantees (19.4 per cent). During the corresponding quarter of the previous year (July-September 2007), equity constituted 74.3 per cent of the proposals for investment, while guarantees and loans formed 13.8 per cent and 12 per cent, respectively.
In the first half, outward FDI fell 29.5 per cent to $5.72 billion as against $8.10 billion during April-September 2007-08. Of the total investment, 82 per cent was in the form of equity, while the remaining was debt. Against this, during April-September 2007, 87 per cent of the investments JVs and WOS were in the form of equity and the remaining 13 per cent were loans.
During the first half of 2008-09, 2,000 proposals amounting to $8.94 billion were cleared for investments abroad in JVs and WOSs, as against 1,049 proposals amounting to $11.39 billion during the corresponding period last year.
While the number of proposals recorded an increase of 90.7 per cent over the corresponding period of the previous year, the magnitude of investment proposals showed a decline of 21.5 per cent.
