Domestic cos can issue foreign bonds
The Reserve Bank of India said on Tuesday that domestic companies could now issue foreign currency exchangeable bonds (FCEBs).india Updated: Sep 23, 2008 21:29 IST
The Reserve Bank of India said on Tuesday that domestic companies could now issue foreign currency exchangeable bonds (FCEBs). The move will enable companies to unlock inherent value to raise funds rather than source funds from outside.
“This will allow companies to unlock a part of their holdings in group companies to meet their financing requirements other than real estate and capital market investments,” said Deepak Jasani, head of retail research, HDFC Securities.
FCEBs are bonds issued by a domestic company in a foreign currency to investors outside India. The principal and interest of such bonds are paid in foreign currency. “The FCEB may be denominated in any freely convertible foreign currency,” the RBI said in a notification. These bonds may be either partially or fully converted into equity shares on a later day on the basis of any equity-related warrants attached to them.