Business Daily from THE HINDU group of publications
Tuesday, Jul 14, 2009
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Business Daily from THE HINDU group of publications Tuesday, Jul 14, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Corporate Corporate - New Projects Money & Banking - Credit Market India Inc borrows to build
K. Ram Kumar Mumbai, July 13 India Inc appears to be shrugging off its aversion to borrowing to set up greenfield projects and undertake brownfield expansion. This is underscored by the quantum jump in debt arranged by one of the leading investment banks, SBI Capital Markets, in the first three months of the current financial year. The nervousness that followed the global economic meltdown last year seems to be easing. SBICAPS, the investment banking subsidiary of State Bank of India, has helped 24 companies, most of them in the core sector, tie up funds aggregating Rs 72,500 crore via debt syndication and structured finance from banks in the first three months of the current financial year against around Rs 95,000 crore for 54 companies in the whole of the last financial year. In the April-June 2009 quarter, SBICAPs arranged funds aggregating Rs 30,702 crore and Rs 25,709 crore for eight power and four oil and gas companies, respectively. Its intermediation also led to sanction from banks for three telecom companies (aggregating Rs 4,300 crore); two steel companies (Rs 3,395 crore); three road projects (Rs 3,080 crore); and four other companies (Rs 5,370 crore). Optimistic forecast“Even during the September-October 2008 period when the tremors of the global economic downturn were just beginning to be felt in the Indian market, we could arrange six debt syndication deals at an average of Rs 3,000 crore debt a deal. The first quarter of FY2010 was robust. We may surpass last year’s numbers in the first half itself,” said a senior official who declined to be identified. The optimism of the official stems from the fact that the government wants to give infrastructure development a big push. The Union Budget has enabled the India Infrastructure Finance Co and banks to support projects in critical sectors involving a total investment of Rs 1 lakh crore. Pointing out that loan sanctions’ pipeline of banks was strong, Mr M. V. Nair, Chairman and Managing Director, Union Bank of India, had in an earlier interview to this paper said, “From October 2008 till May 2009, loan sanctions by the banking sector were higher than in the previous year, by about 150 per cent. In Union Bank’s case, it was almost 180 per cent higher. Last month (May) we had close to Rs 19,000 crore of unavailed sanctions in place.” And right now, the indicators are that business confidence is poised to return, leading to better utilisation of sanctioned laons. Banks’ lending on the rise Banks for restoring tax sop on long-term lending to core projects Banks gearing up to lend more this fiscal Looking to banks to lend more More Stories on : Corporate | New Projects | Credit Market
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