The Hindu Business Line : Cos raise over Rs 75,000 cr from global markets in 2005

INDIAN companies have raised more than Rs 75,000 crore ($17.12 billion) from the overseas markets in 2005, a growth of 88 per cent over the previous year.

According to Barclays Capital, Indian companies raised Rs 75,458 crore from the overseas financial markets in 2005 as companies grew their businesses and foreign appetite for Indian assets stayed robust.

It expects this trend to persist in 2006 as investments continue at a brisk pace, a release from the investment bank said.

Foreign debt instruments: Mobilisation by foreign debt instruments, including Rs 17,136 crore in foreign currency convertible bonds (FCCBs), totalled Rs 57,476 crore compared with Rs 17,982 crore through American and global depository receipts.

It also compared favourably with Rs 26,880 crore raised from the domestic equity market and Rs 58,780 crore from the local debt market, indicating that FCCBs have now become a key financing instrument for Indian companies.

Strong foreign appetite: "Foreign appetite for Indian assets is very strong. Investors see value in Indian companies, which are becoming increasingly competitive globally, for several reasons from relatively low costs and high levels of skill, to a growing domestic and international market," said Mr Raju Shukla, Managing Director and head of investment banking and debt capital market, Barclays Capital (Southeast Asia).

FCCBs another choice: Mr Madan Menon, Co-CEO of Barclays Capital India, said FCCBs have become another instrument of choice for Indian borrowers on the back of strong corporate growth, supported by buoyant liquidity in the international market.

He said the number of issuances would dramatically increase in the next 12 months.

A total of 106 companies raised funds from the overseas equity, debt and FCCB markets, with 93 accessing the debt and FCCB markets.

Among those accessing the debt and FCCB markets, 33 were mid-cap companies and included Jaiprakash Associates, Aurobindo Pharma, Amtek Auto and Graphite India, all of which raised funds from the overseas markets for the first time through FCCBs.

The year also saw the largest FCCB issue by an Indian company ever and the largest Asian issue this year from HDFC which raised $500 million. Bank of India raised $250 million.