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Offshore funding paints a gloomy picture in FY 08
By siliconindia
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Monday, 05 January 2009, 15:57 IST |
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New Delhi: A 46 percent decline in offshore funding activity of corporate India to $19.41 billion, has seen a widespread revision in investment strategies, given the backdrop of the global financial crisis as compared to a fund mobilization of $35.96 billion through asset depository receipts (ADRs), global depository receipts (GDRs), external commercial borrowings (ECBs) and foreign currency convertible bonds (FCCBs), according to the data compiled by the brokerage arm of SMC, Global NexGen Capital.
"Foreign investors are revisiting their investment strategy as to whether they would invest in Indian companies, which are facing pressure because of the global slowdown," NexGen Capital Equity head, Jagannadhan Thunuguntla, said.
According to the report, funds raised through ADRs and GDRs by Indian companies, have fallen by 96.21 percent to $0.10 billion from $2.64 billion in 2007. "Foreign funds are facing redemption pressure at home, hence they are weighing the sustainability of Indian corporates," Thunuguntla added.
Also, the number of corporates facing troubles in raising funds in the domestic market with the IPO volumes declining has also fallen by 50.54 percent to $4.05 billion in 2008 from $8.18billion in 2007. Private equity volumes in India went down to $10.26 billion during January-November 2008, against $19.03 billion in 2007.
"In a nutshell, the ability of the Indian corporate in fund-raising through high profile instrument such as ADRs, GDRs, ECBs, FCCBs, IPOs and private equity has fallen from $63.17 billion in 2007 to $33.73 billion in 2008," the report added.