Ample offshore liquidity helped India Inc raise 23 per cent more through external commercial borrowings in the first 10 months of the current financial year as compared with the corresponding period last year.

In the April 2010 to January 2011 period, Indian companies mopped up $18.703 billion through ECBs ($15.154 billion in the April 2009 to January 2010 period).

As per the latest Reserve Bank of India data, in January 2011 Indian companies mobilised $2.709 billion ($1.319 billion in January 2010).

Ample liquidity in the offshore markets on account of the second round of quantitative easing helped Indian companies raise cheap funds through ECBs, said Mr Moses Harding, Executive Vice-President & Head - Global Markets Group, IndusInd Bank.

With the six months benchmark London Inter-Bank Offered Rate hovering around 0.50 per cent, a blue-chip Indian corporate could raise resources from the overseas market at about 3.50 per cent, on an un-hedged basis, he added.

However, the ample liquidity situation is gradually giving way to a short-supply situation, with the Indian equity market witnessing a reversal in flows, said Mr Moses.

Major borrowers

Among the companies that raised money through ECB in January 2010 under the approval route are Rural Electrification Corporation ($500 million for on-lending to the power sector) and Reliance Communications Ltd ($255 million to refinance rupee loan taken for paying the 3-G spectrum).

Among the companies that raised money through ECB in January 2010 under the automatic route are Hindustan Petroleum Corporation Ltd ($400 million for modernisation); Aircel Ltd ($355 million for import of capital goods); SP Jammu Udhampur Highway Pvt.Ltd ($350 million for road projects); and Dishnet Wireless Ltd ($345 million for import of capital goods).

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