 "RBI, Reserve Bank of India")
Indian firms, including non-banking financial companies, have filed proposals in April 2024 with the Reserve Bank of India (RBI) to raise $4.28 billion through External Commercial Borrowings (ECBs). Out of this, the intent for fund raising through the automatic route amounted to $3.89 billion and that via the approval route was $393 million, according to RBI data.
The registrations for ECBs by Indian companies almost doubled to $49.2 billion in the year ended March 2024 (FY24) from $26.6 billion in FY23. The disbursement in ECBs was also over 60 per cent higher at $38.4 billion in FY24 compared to $23.8 billion in FY23, according to RBI.
Among the prominent firms which have filed intent in April with the RBI include non-banking finance company Muthoot Finance, which is looking at a fund raise of $750 million through the international capital market for on-lending operations. Dhamra LNG Terminal Private Limited, which is into warehousing and support activities for transportation, intends to raise $600 million to refinance earlier ECB, RBI data showed.
The public sector undertaking Oil India, engaged in the extraction of crude oil and natural gas, plans to raise about $550 million through ECBs of five years from the overseas branches of Indian commercial banks. Hero Fincorp has filed an intent for raising $250 million for deploying into on-lending activities.
Vikash Halan, managing director at rating agency Moody’s, said India’s domestic liquidity and companies’ internal cash flow can largely cover their capital needs. Yet, offshore funding will remain key despite its share reducing to 12 per cent of India Inc’s total funding due to its higher costs and rising domestic liquidity.
