New Delhi: Driven by increasing demand for credit by banking and corporate sector, overseas borrowings of India Inc has grown more than six-fold to $3.94 billion in the first quarter of calender year 2007, compared to $644 million in the same period last year.
Borrowings of the Indian corporations raised through dollar-, euro- and yen-denominated bonds in the entire calender 2006 stood at $3.2 billion, a Deustche Bank release said on 4 April, citing reports from Dealogic.
Borrowing in the first quarter alone surpassed the last year total fund raising from overseas market, it said.
This year’s big transactions include ICICI Bank’s $2 billion issue in January, the largest bond issue ever from an Indian borrower.
Deutsche Bank, which was the joint-bookrunner for the ICICI Bank deal, was the number one arranger of bonds for Indian issuers with a 33.84% market share, it claimed.
“India’s banks are benefiting from strong domestic economic growth, which has driven demand for corporate lending higher. Foreign currency debt markets provide these banks and the Indian economy with an efficient and deep source of funding to fuel continued growth”, Deutsche Bank India managing director and CEO, Gunit Chadha, said.
Funding received through these bonds is kept offshore and used to provide Indian corporations, whose global standing has been raised through a number of high-profile foreign acquisitions, with an alternative source of funding via their own offshore lending programmes.
The growth is significant in the context of rating agency Standard & Poor’s upgrading India’s sovereign credit rating to investment grade (BBB-) in January.