The Hindu Business Line : ECB inflows down 35%

In the eight-month period up to November 2008, for which figures released by the Reserve Bank of India are available, Indian companies raised close to $14 billion. They raised the equivalent of Rs 67,000 crore outside during this fiscal so far.

During the same period, Indian banks lent about four times that amount to the corporate sector.

About 60 companies raised close to $1.7 billion in November. Prominent borrowers in November included Vedanta Aluminium ($406 million), Reliance Industries ($400 million) and IRFC ($100 million).

ECB inflows have slowed down during the last one year, attributable partially to the liquidity crunch and confidence crisis in US and Europe as well as to the relatively lesser appetite for funds among domestic companies.

In 2006-07, Indian companies had raised $ 25 billion through ECBs and that climbed to $ 31 billion in 2007-08.

Comparatively, the ECB figures in the current fiscal show a lukewarm trend.

This was despite some relaxations announced a trifle belatedly by the government to encourage greater inflows (during a period when the rupee was beginning to depreciate against the dollar).

The government liberalised the norms governing use of ECBs for infrastructure spends, besides hiking the cap on costs.

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