New Delhi: Corporate India’s acquisition spree has propelled the country ahead of China in terms of raising syndicated loans as companies have mopped up more than $8 billion so far this year to fund expansion projects.
According to data complied by global consulting firm, Dealogic, loans gathered by BRIC nations (Brazil, Russia, India and China) rose by 104% to $78.9 billion so far this year from $38.7 billion in the corresponding period of 2006.
Indian companies account for 10.5% of the total syndicated loans by BRIC nations, with borrowings of about $8.28 billion in 2007 so far. This is higher than China’s 7.9% or over $6 billion, Dealogic said.
“Russia is the most active BRIC nation with a 67.9% market share, followed by Brazil at 13.6%, India at 10.5% and China at 7.9%,” the report said.
Dealogic said proceeds of the loans have been mainly used for acquisition purposes. “Around 47% of the proceeds of the BRIC nations syndicated loans was utilized for acquisition purposes,” it said.
A whopping $36.7 billion was utilised for seven acquisition deals in 2007, quite a jump from $2.3 billion for six deals in 2006.
Oil and gas was the top industry group, raising $39 billion through 11 deals in 2007. This represented an increase of 186% compared to corresponding period in 2006 at $13.6 billion for 14 deals.