India Inc’s ECB mop-up soars 60% y-o-y in July at $3.4 billion
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India Inc raised 60 per cent more via external commercial borrowings (ECBs) in July 2021 at $3.434 billion against $2.147 billion in the year-ago period.
The quantum of resources mopped up via ECBs in the reporting month is also 131 per cent more vis-a-vis $1.484 billion in June 2021.
Overall, during the first four months of the current financial year, India Inc raised $8.024 billion. This is 42 per cent more than the year-ago period’s $5.654 billion.
This indicates that Indian companies are actively tapping overseas financial markets to take advantage of low interest rates before the US Fed starts tapering of bond purchases.
The resource raising via ECB comes even as banks’ credit growth continues to be tepid. As per RBI data, on a year-on-year (y-o-y) basis, non-food bank credit growth stood at 6.2 per cent in July 2021 as compared to 6.4 per cent in July 2020.
Among the companies that raised big monies in July 2021 include Adani Ports And Special Economic Zone Ltd ($750 million), Indian Oil Corporation Ltd ($500 million), REC Ltd ($400 million), Matix Fertilisers And Chemicals ($320 million/ 4 years and 11 months), Adani Electricity Mumbai ($300 million), Housing Development Finance Corporation ($250 million) and Matix Fertilisers and Chemicals ($237.5 million/ 21 years).
ECBs are commercial loans raised by eligible resident entities from recognised non-resident entities. These loans are required to conform to parameters such as minimum maturity, permitted and non-permitted end-uses, maximum all-in-cost ceiling, etc.
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