Indian companies are taking cover on unhedged positions as rupee falls

Top companies with significant export income are continuously raising debt from abroad to refinance earlier loans and, in the process, cut costs

With the rupee falling below the psychological barrier of 69 to a dollar on Thursday, companies are taking cover on unhedged positions to reduce further losses. The Indian currency has lost 7.1 per cent of its value against the US one since January, making finance heads redraw their foreign exchange (forex) strategy.

According to an estimate, almost 65 per cent of corporate India’s forex exposure is unhedged. Any further depreciation will lead to deterioration in the credit profile of 75 of the top 100 non-financial companies, say analysts.

“Many companies are taking cover now as Barclays has predicted a fall