India Inc’s foreign borrowings dip

Indian industry borrowed $1.05 billion from foreign markets last month, including through rupee denominated bonds (RDBs).

In contrast, the borrowings were $1.32 billion in May last year. However, the two sets of data are not comparable as the RDB route was not there until September.

According to the Reserve Bank of India data, of the total in May this year, external commercial borrowings (ECB) and RDBs contributed almost equally at $523.95 million and $525.76 million respectively.

But June onwards, it may be difficult for companies to float rupee bonds overseas as they will be subject to scrutiny from Reserve Bank's Foreign Exchange Department before every such issue.

The RDB route has become a popular source of fund raising.

Six entities issued rupee bonds — popularly referred to as masala bonds -- including the National Highways Authority of India’s $465.66 million (~3,000 crore) for road construction.

J M Enviro Technologies Pvt raised $32.91 million (~212 crore) and HM Industrial $23.28 million (~150 crore) through RDBs.

Those among taking the ECB window were Idea Cellular ($214 million) for refinancing of earlier such borrowing, Renew Wind Energy ($73.10 million) for power generation and Crown Beers India ($54.33 million) for general corporate purpose.