Large ECBs for Overseas acquisitions in March 2013

ECBs inflows fell by around 11% during FY2013 at US$ 31.99 bn as compared with US$ 35.96 bn in FY2012

Indian firms have raised US$ 5.08 bn through external commercial borrowings (ECBs) in the month of March 2013 by automatic and approval route. The borrowings stood at US$5.08 bn in March 2013 as compared to US$ 3.83 bn in March 2012. ECBs fell by around (-) 11% as compared with the corresponding period last year, as borrowings declined to US$ 31.99 bn in FY2013 from US$ 35.96 bn in FY2012.

External commercial borrowings (ECBs) since January 2011                                                                                   (US$bn)

 Source: PHD Research Bureau, compiled from RBI

Note: ECB contains both automatic and approval routes

India has received gross ECB worth US$ 209.82 bn between FY2001 and FY2013. The ECBs inflow stands above US$ 25 bn during FY2008, FY2012 and FY2013. The average ECBs inflow stands at US$ 12.06 bn during FY2001-FY2010, while the average ECBs inflow stands at US$ 29.73 bn during FY2011-FY2013 period.

Gross ECB Inflows                                                                                                                                                (US$bn)

Source: PHD Research Bureau, compiled from RBI

Note: ECB contains both automatic and approval routes

A closer look at the ECBs pattern reveals that the lion’s share in ECB during the month of March 2013 is held by the overseas acquisition contributing to about 19% of the total, followed by modernisation at around 17% and rupee expenditure Loc.CG at around 15%.

  Pattern showing ECBs during March 2013                                                                                                     (% share in total)

  Source: PHD Research Bureau, compiled from RBI

 Note: ECB contains automatic& approval route both

Warm regards,

Dr. S P Sharma

Chief Economist