The Hindu Business Line : Aviation cos top list of overseas borrowers

New Delhi, Dec. 22 Aviation companies have resorted to the highest amount of External Commercial Borrowings (ECBs) to fund their expansion plans during the first seven months of the current financial year (April-October 2007), followed by steel companies.

Six sectors, namely, aviation, steel, telecom, automobiles, pharmaceuticals and shipping, have taken $10,377-million ECBs during the first seven months out of a total of $19,209 million, accounting for more than 54 per cent of total ECBs during this period.

According to the data compiled by the Reserve Bank of India, airline companies have made ECBs amounting to $3,637.40 million.

Aircraft buy

The largest carrier Jet Airways has borrowed $1,856 million, mainly to acquire aircraft. The new entity created through the merger of Air India and Indian Airlines — National Aviation Company Ltd — has taken $1,020 million in October this year. Earlier Indian Airlines and Air India Charters had borrowed $518 million and $429 million, respectively.

Steel cos’ funding

Steel companies’ total ECBs were $3,114.35 million among whom Tata Steel tops the chart with $875 million for acquisition of Corus and funding its expansion plans followed by Ispat Industries and JSW both of whom have taken $500 million.

Telecom sector accounts for $1,309.76-million ECBs in which Reliance Telecom accounts for $500 million and Tata Telecom for another $400 million. Together these two companies borrowings level is close to 70 per cent of total borrowings of all companies in the telecom sector.

Auto majors

Among the automobile companies, Tata Motors had taken ECBs worth $490 million followed by Ashok Leyland $295 million, Amtek Automobiles $250 million and Hyundai $150 million. In total, the automobile sector has made $1,236.44-million borrowings. In the pharmaceutical sector, a large number of companies have made ECBs ranging from less than $1 million to $250 million in a single trance. Out of the total borrowings of $625.44 million, Sterling Biotech ($250 million) is the highest borrower.

Among the shipping companies, Great Eastern Shipping has taken the highest amount of $99 million followed by Shipping Corporation of India $92.33 million and Varun Shipping $48 million.

Largest borrower

However, among all the ECBs taken by Indian companies during the April-October period, Reliance Industries Ltd stands out as the single largest borrower making a borrowing of $2,000 million in a single trance in May this year, which is 10.41 per cent of all ECBs.

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