Indian companies’ overseas investments in the first eight months of the current financial year were lower by $6.372 billion compared to the corresponding year-ago period.
In April-November 2012 period, outward investment by Indian companies was at $17.443 billion, against $23.815 billion in the year-ago period.
N. S. Venkatesh, Chief General Manager (Treasury), IDBI Bank, attributed the slowdown in overseas investment to: major companies that were on the block after the last financial crisis being already taken over; Indian companies finding better returns in the domestic market; and/or the Euro zone crisis deterring them from making investments. According to RBI data, in November, Indian companies invested $2.311 billion in their overseas ventures against $2.034 billion in the year-ago period.
These investments were by way of equity, debt and guarantees.
The big ticket investments in the reporting month were: Infosys’ $207 million in its Switzerland-based wholly-owned subsidiary (WOS) Lodestone Holding AG; Videocon Oil Venture’s $127 million in its Cayman Island-based WOS; REI Agro’s $95 million in its UAE-based WOS.
In the financial year so far, the best month for outward investments by Indian companies was June at $3.532 billion. Last year, too, the best month for outward investments was June at $5.478 billion.
Raising funds
Meanwhile, Indian companies raised $4.299 billion via external commercial borrowings and foreign currency convertible bonds in October 2012. While two companies raised resources via FCCBs, 95 companies did so via ECBs.
Among the companies that raised resources overseas include: Bharat Petroleum Corporation ($500 million); Indian Oil Corporation (327 million); Steel Authority of India ($150 million); Michelin India Tamilnadu Tyres Pvt Ltd ($130 million); and Larsen & Toubro Ltd and Idea Cellular ($100 million each).