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Rs 2.97 lakh cr garnered by Indian firms in foreign funds
Indian companies have raised Rs 2.97 lakh crore through various instruments during the last nine months of 2007, reports BS Srinivasalu Reddy.
Riding on a strong foreign investor sentiment for the rupee, Indian companies have raised Rs 2.97 lakh crore through various instruments during the last nine months of 2007, a staggering 76 per cent higher than the same period in 2006.
In the wake of domestic interest rates looking up over the last six months, the companies seem to have been forced to meet most of their fund requirements from overseas. Foreign sources have contributed nearly two-thirds of these funds.
The funds raised through ADRs/GDRs, foreign currency convertible bonds (FCCBs), international bonds and syndicated loans shot up by 147 per cent in the last nine months, compared with the same period last year, according to Bloomberg data.
However, funds raised through domestic sources like initial public offers, follow-on offerings (FPOs), qualified institutional placements (QIPs), rights issues and domestic bonds were up only by around 13 per cent.
Growth in IPOs did keep pace with the overall pace of growth by keeping up its share among the total funds raised at 9.48 per cent, against 9.18 per cent in 2006. Fund mop up through IPOs grew by 81 per cent, although it was FPOs and QIPs that lifted the sentiment with a growth of 113 per cent over last year.
"Several listed Indian companies are aspiring to grow organically and inorganically. QIPs, which are growing rapidly, will remain the main source of funds for these companies, followed by private equity funding," said Kotak Investment Banking COO PR Ramesh.
"IPOs will remain on the up-swing. But ADRs/GDRs, tapped by a couple of major issuers, is unlikely to be a major option. Even FCCBs may recede, given the uncertain interest-rate scenario," Ramesh added.
During the current year so far, sourcing through international bonds seems to be the most attractive option for Indian companies, raising Rs 31,720 crore during the last nine months through them. This is 448 per cent higher than what they raised in the same period last year.
ADR/GDRs have also posted an unusual growth of 278 per cent at Rs 24,253 crore ($6,103 million), followed by syndicated loans with a 133 per cent growth at Rs 115,294 crore ($29,012 million) and FCCBs with 40 per cent growth at Rs 25,155 crore ($6,330 million).
