Suzlon, SCI, Delhi Int'l Airport may raise funds via ECB

The external commercial borrowing (ECB) market, which had dried up post the Lehman crisis, is beginning to see a revival in interest. CNBC-TV18 learns that a bunch of Indian companies are lining up to borrow via the ECB route. CNBC-TV18’s Vidhi Godiawala reports.

Below is a verbatim transcript of her comments on CNBC-TV18. Also watch the accompanying video.

Indian companies which raised billions of dollars in 2007–2008 via the external commercial borrowing (ECB) route have saw a huge drop in the amount of funds mobilized through that in the 2008 September liquidity crises. Now after the qualified institutional placement (QIP) route it seems to be the new mantra for corporate India to take is the ECB route for funding.

According to sources, Suzlon is looking to raise USD 700 million at a tenure of three–six years via the ECB route. Also, Shipping Corporation, we understand is looking to raise between USD 200–300 million at a tenure of eight–ten years via ECBs. Similarly, the Delhi International Airport which is run by the GMR Infra group is looking to raise about USD 300 million for eight–ten years. Why this new found to raise funds via ECB? That’s because of the depreciating dollar and the falling rates in the global market as the risk appetite returns.

Dollar funding has become cheaper as compared to the rupee loan especially for companies which have their revenues in dollars. So it gets easier for them. These companies are raising these funds for their ongoing capital expansion plans and apart from these companies even financial institutions what we understand from our sources like IDBI is also looking to raise USD 225 million via the ECB route and it is likely to be priced at a LIBOR + 235 bps. We also understand that their bankers who syndicating the loan would be RBS, ANZ and Deutsche Bank.