Investment Valuation in India

This is in response to the queries I received on whether ECB or FCCB is more convenient/liberal/less regulated. For guidelines on each of them, please refer to the links attached in the respective articles. FCCB http://www.icai.org/icairoot/publications/complimentary/cajournal_nov05/703-708.pdf . ECB http://www.icai.org/icairoot/publications/complimentary/cajournal_may04/p1216-19.pdf As regards which is more convenient, it always depends on the company raising funds. Historically, companies prefer ECBs over FCCBs . The RBI data for the month of December 2007 showed only 7 of 44 companies raising funds through FCCBs automatic route and all 7 companies preferring the ECB over FCCB through approval route. http://rbidocs.rbi.org.in/rdocs/ECB/pdfs/83662.pdf Government has said that it is contemplating relaxing norms governing external commercial borrowings (ECBs) to enable Indian corporates access higher foreign capital at low cost. Besides, a review is underway to remove restrictions on fo...

External Commercial Borrowings (ECB) External Commercial Borrowings (ECBs) include bank loans, suppliers' and buyers' credits, fixed and floating rate bonds (without convertibility) and borrowings from private sector windows of multilateral Financial Institutions such as International Finance Corporation. Euro-issues include Euro-convertible bonds and GDRs. In India, External Commercial Borrowings are being permitted by the Government for providing an additional source of funds to Indian corporates and PSUs for financing expansion of existing capacity and as well as for fresh investment, to augment the resources available domestically. ECBs can be used for any purpose (rupee-related expenditure as well as imports) except for investment in stock market and speculation in real estate. External Commercial Borrowings (ECB) are defined to include commercial bank loans, buyer’s credit, supplier’s credit, securitised instruments such as floating rate notes, fixed rate bonds etc., cred...