Given the prevailing high interest rates in the country, Indian companies have resorted to greater external borrowings in the month of February. As per data released by the Reserve Bank of India, Indian companies filed for external commercial borrowings (ECBs) worth $2.6 billion (Rs 13,300 crore) in February for funding capital expenditure, acquisitions abroad and to repay old loans.
The move has been made to take advantage of the very low interest rates in the international market. Even after accounting for foreign currency risks, hedging costs and the spread over benchmark rates, the cost of these funds are low, compared to the high lending rates charged in India.
In February, Reliance Communications, several of Vodafone group companies, Orchid Chemicals & Pharmaceuticals, Larsen & Toubro and Panama Wind Energy were among the major companies that raised money from overseas market.
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