India Inc Foreign Borrowings Fall 13.3% to $7.05 Billion in September
Fundraising plans of Indian companies through overseas debt channels saw their first monthly contraction in five months, with total proposals under External Commercial Borrowings (ECBs) and Foreign Currency Convertible Bonds (FCCBs) falling by 13.3% to $7.05 billion in September, according to data released by the Reserve Bank of India (RBI).
The total value of overseas borrowing applications stood at $8.13 billion in August and $7.70 billion in July. Prior to September's drop, corporate foreign borrowing filings had expanded steadily through the summer months, climbing 25.79% in May, 28.3% in June, 26.7% in July, and 5.6% in August.
Route-Wise Distribution
Of the total $7.05 billion registered with the central bank in September, the vast majority was routed through standard regulatory channels:
- General Permission Route: Accounted for $6.71 billion across corporate and financial entities.
- Special Permission Route: Captured $336.94 million, which comprised three registrations by InterGlobe Aviation (the operator of IndiGo) specifically earmarked for the import of capital goods.
- Rupee-Denominated Bonds (RDB): The RBI data recorded zero proposals under the masala bond route during the month.
Key Borrowers and Corporate Allocations
State-backed infrastructure financiers, energy majors, and real estate developers accounted for the largest individual borrowing programs.
Major Borrowers in September:
- NaBFID: The National Bank for Financing Infrastructure and Development registered $1 billion with a 10-year maturity to support its domestic on-lending and sub-lending operations.
- Mangang Constructions: Filed an intent to raise $1.01 billion for general corporate purposes with a long-term maturity of 24 years.
- Danube Industries: Proposed raising $921.11 million for general corporate purposes.
- HPCL: Hindustan Petroleum Corporation registered $500 million for general corporate requirements.
- HUDCO: Housing and Urban Development Corporation registered $500 million aimed at refinancing existing rupee debt.
- REC: The state-run power sector financier registered $300 million for general corporate purposes.
- NHPC: The state-owned hydropower producer registered $254.51 million for working capital requirements.
Among other notable filings, Sammaan Capital sought $300 million for on-lending, India Shelter Finance Corporation registered a $306 million 5-year FCCB, The Shipping Corporation of India registered $100.44 million to refinance rupee loans, and Adani Airport Holdings filed for $100 million for modernization and unit expansion.
Market Implications
The sequential drop in foreign debt registrations comes as Indian corporates balance currency risk, hedging costs, and global benchmark yields. Despite the monthly pullback, public sector enterprises and quasi-sovereign financial institutions such as NaBFID and REC remain active users of offshore liquidity, utilizing long-tenor foreign currency credit to fund domestic capital expenditure and infrastructure rollouts.
