Indian firms raising cheaper funds abroad

Indian companies, specifically banks, in international markets are raising money through bonds at a finer rate than many financial institutions from other countries rated superior to India are doing.

India has an international rating of BBB-, a notch above junk.

ICICI Bank last week raised $300 million through 5.5-year bonds at equivalent maturity US treasury plus 155 basis points. The fixed rate coupon of the bond came at 3.25 per cent. India’s largest lender, State Bank of India (SBI), similarly, priced its bonds too at 3.25 per cent in January.

Axis Bank, through floating bonds, raised money at 2.135 per cent. State-owned NTPC