India Inc’s Foreign Borrowing Jumps to $6B in June
By Business Desk
Indian companies, including NBFCs, plan to raise $6.08 billion via ECBs and FCCBs in June, a significant increase from May, signaling strong demand for external financing.
Indian companies signaled a substantial increase in foreign borrowing intentions during June, with proposals reaching $6.08 billion. This marks a notable rise from the previous month’s figures, reflecting robust demand for external financing.
The key figures from the June filings with the Reserve Bank of India (RBI) include:
Total June borrowing intent: $6.08 billion.
May borrowing intent: $4.74 billion.
Automatic route proposals: $5.94 billion.
Special route approvals: $133 million.
This surge in intent covers both External Commercial Borrowings (ECBs) and Foreign Currency Convertible Bonds (FCCBs). The vast majority of these funds are sought through the automatic route, indicating a streamlined approval process for most proposals.
Major Corporate Funding Initiatives
Several major corporations outlined their foreign funding plans:
Microsoft Corporation (India) Private Limited aims for $1.44 billion for general corporate purposes over five years.
Power Grid Corporation of India Limited seeks $497.92 million from a foreign government or development financial institution for on-lending over 14 years and two months.
Serentica Renewables India 4 Private Limited plans to secure $450 million from an IFSC financial institution to refinance an existing ECB over five years.
Serentica Renewables India 24 Private Limited intends to raise $250 million from an IFSC financial institution for a new project, also over five years.
PFC proposes to raise $300 million from the international capital market and an additional $52.28 million from a non-resident financial institution, both for general corporate purposes over five years.
Non-banking financial companies (NBFCs) also actively contributed to this heightened foreign funding activity in June. Their proposals highlight a continued reliance on international sources for both refinancing and new lending operations.
NBFCs Tap Foreign Markets
Specific NBFCs detailed their borrowing intentions:
Shriram Finance Limited seeks $132.50 million from an IFSC financial institution to refinance an existing ECB for two years.
SMFG India Credit Company Limited aims to raise $150 million from an IFSC financial institution for on-lending activities over three years.
The significant increase in foreign borrowing intent from diverse sectors underscores India Inc.’s strategic shift towards global capital markets. This trend reflects a broader confidence in the Indian economy and a proactive approach to managing capital requirements for growth and refinancing.