Adequacy indicators, such as import cover and short-term debt to reserves, remain the strongest in more than a decade - unlike for many EM peers.Indian firms obtained ECB (External Commercial Borrowings) sanctions worth $ 3.5 billion or an estimated Rs 26,000 crore in April-June'2020, show latest RBI data. This is about one-third of the sum - $11.9 billion-they borrowed in the same period a year ago.“Surging reserves and rising ammunition to keep the currency stable will provide corporates the optionality to look at foreign sources of financing, as borrowing costs overseas remain low,” said Rahul Bajoria, chief economist at Barclays India. "The rise in reserves is largely a reflection of a current account surplus augmenting capital inflows.”US 10-year Treasury Bill, a global gauge for pricing bonds, yielded 0.68 percent versus 1.88 percent at the beginning of this year. This should bring borrowers’ funding costs lower unless the risk perception changes. During … [Read more...] about India Inc likely to speed up foreign fund-raising plans
Dam fund raising status
NEW DELHI: Public sector Jammu and Kashmir Bank is looking to raise up to Rs 4,500 crore through equities and debt, according to its annual report.The bank will seek shareholders' approval for the fund raise proposal in its annual general meeting to be held on September 28, 2020, the lender said in its Annual Report 2019-20.The implementation of Basel III guidelines has necessitated the need for banks in India to augment their capital base.This becomes important as Basel III capital requirements call for increase in quantity and quality of capital, besides providing for capital buffer during economic downturn, the lender said in its report.In the light of the economic and business environment in India besides the downward pressures in the financial sector, increase in NPAs, slow growth in overall business variables, among others, the bank gauges the capital requirements for the near to medium term from time to time, it said.Based on these factors in the capital planning exercise … [Read more...] about J&K Bank plans to raise up to Rs 4,500 cr capital via equity, debt
In the last three months many private and public sector banks have raised more funds than their previous fundraising cycles. Each bank has its own freedom to raise funds with shareholders approvals. But what makes banks borrow huge funds? When the demand is very low and supply side situation is worse, consumption is all time low and more importantly, capacity utilisation is not happening. In fact the top bankers are going slow on lending on only case to case basis. Are bankers preparing for the worst?A bank official who recently raised funds told me that in the current situation every bank wants a liquidity cushion. Everybody went through worst of times in the initial phases of lockdown. The current situation is still very uncertain, and bankers don't want to raise funds later in a hurry. Everybody wants to make their balance sheet stronger. The worst reality is not over and bankers want to be ready for the worst. On the other front, bankers are yet to analyse the exact impact of … [Read more...] about What makes banks borrow huge funds?
“Zomato Pvt Ltd has closed a primary fund raise of $100 million from Tiger Global Management, LLC (through its investment vehicle Internet Fund VI Pte Ltd and/or any of its affiliates), and $60 million from MacRitchie Investments Pte Ltd, an indirect wholly-owned subsidiary of Temasek Holdings and/or any of its affiliates,” Info Edge said in a regulatory filing. … [Read more...] about Zomato raises $160 million in funding from Tiger Global, MacRitchie Investments
MUMBAI: Raising long-term finance will continue to be a challenge for non-banking finance companies (NBFCs), although banks are willing to adopt a collaborative approach to help revive the sector.According to SBI MD Arijit Basu, NBFCs had stepped in to lend to small and medium enterprises when banks were not lending. “When the going was good, they were raising funds not just from banks but through the markets by issuing short-term commercial papers.” He said that this dried up because investors turned risk-averse . Speaking at the Ficci-IBA summit here, Basu said that banks needed to revive credit risks by engaging with NBFCs, including the smaller ones. “There is only one issue — as much as possible, NBFCs, even the smaller ones, need to be able to access long-term resources, which cannot just come from the banks. And that is a perennial problem in India,” said Basu. He added that although efforts have been made for long to deepen the bond markets, this … [Read more...] about Raising long-term finance to be tough for NBFCs: Bankers