RBI easing drives Indian companies’ $7.70 billion overseas borrowing

Indian companies, including the operating company of Indigo and Tata Capital, filed proposals worth $7.70 billion in July to raise money through external commercial borrowings (ECB), registering a 27% growth over the previous month, data from the Reserve Bank of India (RBI) showed.

The surge in overseas borrowing plans follows the RBI move to ease the ECB framework, which increased the borrowing cap to $1 billion from the earlier $750 million in a year and removed restrictive all-in-cost ceilings.

The central bank had eased the regulations in February.

Air India and Interglobe Aviation, which operates India’s largest passenger airline Indigo, together filed proposals worth $780 million taking special permissions from the central bank. Interglobe alone sought to raise $310 million for 12 years for importing capital goods, the monthly data sheet released by RBI showed.

Housing & Urban Development Corporation (Hudco) sought to mobilise $1.56 billion for on lending as well as refinancing of rupee loans.

Among other bigger non-bank lenders, Tata Capital filed for $500 million for refinancing rupee loans while Godrej Finance applied for $200 million and Piramal Finance $120 million for onlending.
The Nuclear Power Corporation of India sought a general permission for $100 million borrowing to fund a new project.

The data is based on applications for ECB for which the central bank allotted loan registration numbers in July.