Overseas investment by India Inc soared nearly 50 percent in 2024 as Indian companies sent $32.5 billion abroad, data compiled by Moneycontrol from Reserve Bank of India(RBI) releases shows. Indian companies sent $21.9 billion in 2023 and $23.7 billion in 2022.
Indian corporates are allowed to send money overseas for purposes such as capex investment, capital infusion in a foreign subsidiary or for setting up joint ventures. These investments are made through Overseas Direct Investment route(ODI), which allows companies to send up to $1 billion a year to overseas jurisdictions.
The ODI route is different freon the Liberalised Remittance Scheme(LRS) meant for individuals sending money overseas, which comes with a limit of $250,000 per individual a year.
Larsen and Toubro’s (L&T’s) $2.4 billion investment in its Saudi Arabia subsidiary, L&T Hydrocarbon Saudi Company, in February 2024 was the largest ODI transaction of year.
The company secured a $4 billion order from Saudi’s state-owned Aramco in FY24 for the gas company’s expansion projects, according to L&T’s exchange filings.
L&T also won a project in the transmission and distribution vertical in Saudi Arabia worth around Rs 10,000 crore-Rs 15,000 crore, according to the company’s September 24 exchange filing.
Bharat PetroResources, a stated owned company, issued guarantees worth $669 million in August in favour of its international subsidiary in Netherlands, BRPL International, making it the second largest transaction of the year.
Bharat PetroResources owns various oil and gas assets across the world. In July 2022, the government approved $1.6 billion investment into BPCL for development of a concessional project in Brazil.
Bengaluru-based healthcare technology company Sagility India made an equity infusion of $629 million during the year into its US-based wholly owned subsidiary, Sagility (US) Holding, making it one of the largest ODI transactions of 2024. The company focuses on healthcare technology and caters to several American clients.
Tata Steel’s $440-million loan to T Steel Holdings Singapore in March also features the list of large transactions.
On August 28, Tata Steel also announced it acquired 178 crore shares of T Steel Holdings infusing an additional capital of $280 million.
T Steel Holdings in as investment holding company and manages the overseas steel business of Tata Steel through various subsidiaries.
A $385-million guarantee issued by Adani Ports and SEZ towards its joint venture in Isreal, Mediterranean International Ports ADGD, GMR Power and Urban Infra’s $358-million capital infusion into its Mauritius subsidiary were among the other key transactions of the year, data shows.
Singapore remains top ODI destination
Data compiled from the Department of Economic Affairs(DEA) shows Singapore was the top destination for India’s ODI investment during the year, accounting for 20 percent of the total flows.
Mauritius stood second with a share of 14 percent. The US, the United Arab Emirates and the Netherlands were the other major destinations with about 10 percent share each.
Singapore and Mauritius are generally used by Indian companies to route their overseas investments due to tax benefits. The money sent to Singapore and Mauritius is not usually used there but sent to other countries where the Indian company has capital requirement.
The island nation of Maldives has also featured in the list of top ODI destinations, largely due to a $429-million transaction made by hospitality company Restrocraft Hospitality Private Limited.
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