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Telecom sector the highest borrower, RCOM tops
By siliconindia
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Tuesday, 17 March 2009, 01:26 IST
32,913 crore, according to data released by the Reserve Bank of India (RBI), reports The Economic Times. The share of RCOM amounted to 21,815 crore. The company took ECBs of Rs 4,505 crore in 2006, Rs 12,987 crore in 2007 and Rs 4,323 crore up to September 2008. Followed by Tata Teleservices, which had overseas loans of 1,925 crore in 2007. Idea Cellular's ECBs stood at Rs 770 crore in 2007 and Rs 957 crore in 2008, Vodafone Essar Rs 944 crore in 2007 while Bharti Airtel's ECBs were Rs 916 crore in 2006. The GSM operator has not raised any money from abroad in the last two years. Telecom sector was followed by the power sector, which took overseas loans of 23,368 crore, during the period.
Clarifying the situation, a Chief Financial Officer of a top-notch telcom firm pinpointed that that it is difficult to get rupee borrowing on a fixed rate basis for a long term of more than three years. "Also, when these ECBs were drawn, they were fully swapped and were equivalent to rupee borrowings at a fixed rate. So on a fully swapped basis, they were more attractive than direct rupee borrowings," he said. In the backdrop of the weakening rupee, the companies' liabilities have shot up indefinitely.
According to Angel Broking analyst (IT and Telecom) Harit Shah, the increasing need of billions of dollars as they expand to newer towns and rural areas and money being reasonably cheaper abroad, as opposed to from within the country explains the situations.
