Showing some signs of recovery and stabilization in Indian business environment, Indian companies raised $29.68 billion more through external commercial borrowings (ECB) during the first 11 months of financial year 2013-14 as comparison to $26.96 in the year-ago period.
Further, Indian companies mopped up $4.30 billion in the month of February which was almost 140 percent more than the amount raised in the previous month. High ECB by domestic firms indicate that global investments are confident about Indian businesses. The overseas fund-raising spree by corporates must have been triggered by expectations on the US hiking interest rates in some time and also as the Fed's tapering in the bond purchase programme would eventually run its course. The corporates, which collected large fund in February include ONGC Videsh (raised ECB for an overseas acquisition in two tranches- $1.77 billion for five-years and $725 million for a year), Indian Railway Finance Corporation ($500 million for five years), HDFC ($300 million through a five-year ECB for on-lending to low-cost housing projects) and Bharat Petroleum Corporation ($300 million for three years for working capital purpose).
An external commercial borrowing (ECB) is an instrument used in India to facilitate the access to foreign money by Indian corporations and PSUs (public sector undertakings). ECBs include commercial bank loans, buyers' credit, suppliers' credit, securitised instruments such as floating rate notes and fixed rate bonds etc among other.