The international debt and equity markets are an attractive resource for Indian companies to access capital at interest rates that are lower than the prevailing rates in India, as well as for investors that are capital rich and have an appetite for high growth with moderate risk markets such as India. The avenues mentioned below are usually available for Indian companies looking to raise capital in the global markets.
External commercial borrowings (ECBs) covers debt that Indian companies obtain from banks, financial institutions, private lenders, supplier’s credit and equity partners or corporate entities connected with the Indian company. Up to US$750 million can be raised from banking and related channels through the automatic route, i.e. without approval from the Reserve Bank of India (RBI).
Equity is the most preferred means of raising funds for expansion and new projects without any direct cost or any currency risk. It is also an excellent means for foreign investors to gain from the Indian market with the maximum control over their investment.
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Gautam Khurana is the managing partner at India Law Offices in New Delhi.
New Delhi – 110 049
Tel: +91 11 2462 2216, 2462218
Fax : +91 11 2465 4364
Email: g.khurana@indialawoffices.com