Consolidated FDI Policy: http://bit.ly/ri811t
RBI Circular - External Commercial Borrowings & Trade Credits: http://bit.ly/opZFWH
Foreign currency funding is picking up pace in India, not only for Large Corporates but for MSMEs as well.
In some cases, increased supply is simply the symptom of available liquidity looking for higher returns. In others it is a necessitated by genuine strategic reasons, to finance both organic and inorganic growth.
Demand is being pushed by tightening monetary controls in India (Refer to graphic below). Projects I am closing today are being finalized at a cost 200-250 bps higher than comparable projects I closed less than 9 months ago.
Additionally, foreign financial institutions - Banks, Hedge Funds, PE/VC funds - are now much more entrenched and cognizant of local realities, leading to a broad-based clientele and investment pool and a better ability and appetite to take risks in the market.
As and when time permits, I will try to filter the regulations (full versions in the sources at the beginning of this post) and break them down for quicker consumption. Till then, enjoy the originals. I will add other related Acts and Regulations as required.
Cheers
