NishkaNishkaNishka

Christ University Institute of Management, Kengeri Campus

A monthly financial newsletter

Volume V, Issue 44

Usage of external

commercial borrowings

March 2014

Introduction to Usage of External Commercial Borrowings

Upasana Gurung, F1

External Commercial Borrowing is an additional source of finance for the corporate sec-

tor to facilitate expansion, fresh investment etc. ECBs include Bank Loan, Buyers Credit, Credit

from Suppliers, Commercial Borrowings from the private sector window of multilateral financial

Institutions and Securitized instruments (e.g. floating rate notes and fixed rate bonds) to name

a few. ECBs aid in borrowing funds from abroad. The policies and the upper limit for such kind

of borrowings are framed by three regulatory bodies in India – RBI, Ministry of Finance and the

Department of Economic Affairs. Using ECB, the borrowers should repay 25% of their rupee

debt and the remaining 75% must be used for new projects. However, it must be kept in mind

that ECBs cannot be used for investment in stock markets or for speculating on real estate. ECB

can be accessed in two ways:

Automatic route where no approval from RBI is required.

Approval route where prior approval from RBI is required.

ECBs have to be parked abroad and cannot be remitted to India when it is borrowed for funding foreign currency expenditure. ECB policy has prescribed a $500 Million limit per compa-ny under the automatic route prevails. For borrowers who have already entered into a loan agreement, changes in policy are not applicable. Changes in policies lead to gains or losses for four parties namely RBI, Corporates, Markets and Banks. ECB’s attractiveness: Lenders: ECBs are for a specific and for a medium term such as 3 years. Interest rates re gener-ally floating which provides lenders a cushion against Borrowers: Huge loans can be raised, reputed borrowers can easily avail large amount of funds. It can have diversification of lender’s base. Other benefits associated are the cost of borrowing is less than that of domestic borrowings. Bigger sources of credit as it is global financial mar-kets. Much more flexibility is given by foreign lenders in terms of providing security for ECBs. Disadvantages of ECBs: The default risk could increase along with the risk of bankruptcy. It will result in to more debt in the balance sheet and having more debt can increase the cost of borrowing in terms of interest. The rating agencies will spot the increased debt burden and could possibly lower the company’s rating which in turn would increase the borrowing cost. And as borrowing costs go up, there will be less capital available to draw due to poor credit rating. In case of liquidity crunch this in turn will increase the risk of bankruptcy.

Usage of ECB by Essar Steel

Srijita Mukherjee, F2

Essar Steel Ltd. is one of India’s largest flat carbon steel manufacturers exporting to highly

demanding markets like US and Europe. Controlled

by the Ruia family, Essar Steel Ltd. has its presence

in countries like Canada, USA and Indonesia apart

from India. Mumbai based Essar Steel is one of In-

dia’s largest steel companies whose operations

range from iron ore to ready-to-market products.

Their products find wide acceptance in consumer

segments like automobiles, white goods, construc-

tion, engineering and shipbuilding.

Globally, Steel Industry is experiencing weakening demand, which in turn is causing lower

realizations. Essar steel has a total debt amounting to around Rs 23,500 Crores on its books. Es-

sar steel is the first Indian corporate to receive the go-ahead from the Reserve Bank of India (RBI)

for refinancing expensive Rupee loans with cheaper US Dollar credit through external commer-

cial borrowings to the tune of US $430 Million. The prevailing RBI norms require that the borrow-

ing party can use only 25 per cent of the ECB to repay its Rupee debt and the rest 75 per cent

must be used for new projects, and they are also not allowed to refinance their existing Rupee

loan through ECB. Although, most of the company's earnings from steel are dollar-linked, howev-

er, their liabilities have been in Indian Rupees. This refinancing opportunity empowered them to

restructure the high-cost debt.

It was imperative that the debt of the company was allocated to the earning currency,

causing reduction of earnings' volatility. The dollarizing of rupee debt not only de-risked the bal-

ance sheet, but also stretched out maturity and diminished interest costs. After the earnings

were dollar linked, it served as a natural hedge reducing risks linked with the currency fluctua-

tions. This particular US Dollar debt enabled them to convert the loan payback period to a period

of seven years instead of three years and the company diminished its interest outflow by Rs 450

Crores per annum. With its focus on "dollarizing" its entire debt, the company has now raised US

$1 Billion at LIBOR (London Interbank Offered Rate) plus 4.5-5.5 per cent (Libor being 0.67 % for

one year), and aims at converting the company's entire Rupee Debt into US Dollars in the current

fiscal as it pays an interest of 12-12.5 per cent on its Rupee loans. Therefore, in the case of Essar,

the ECB was subscribed by a large group of banks led by IDBI and ICICI Bank.

http://www.thehindubusinessline.com/companies/essar-steel-raises-1-b-via-ecb-route-to-repay-rupee-loans/

article4833409.html

ECBs in Telecom Spectrum Auction

Aswathy Edison, F1

In September 2013, the RBI had expanded the definition of infrastructure sector for raising

funds through the ECB route. With regard to the Tele Com-

munications sector, the RBI said that mobile telephony ser-

vices or companies providing cellular services, fixed network

telecom and telecom towers will fall under the infrastructure

definition, and would therefore be eligible to borrow funds

through the ECB window.

The latest bidding in the telecom spectrum auction was car-

ried out for 10 days and the government was able to raise Rs.

61,162.22 Crores which exceeded initial expectation of Rs. 47,933 Crores. In all, eight telecom

companies - Reliance Jio Infocomm, Vodafone, Airtel, Aircel, Tata Teleservices, Idea Cellular,

Telewings (Uninor) and Reliance Communications were bidding for the airwaves. Successful bid-

ders will get spectrum for 20 years. Bids worth Rs 30,754 Crores came for 2G spectrum in the

1,800 MHz band and Rs 21,935 Crores was for the premium 900 MHz band.

Terms of the deal

Successful bidders in the spectrum auction were allowed to avail of loans of up to US $ 750 million (about Rs 4,671 Crores) from foreign sources through the External Commercial Bor-rowings (ECB) route to pay for the airwaves. Telecom companies opting for paying this amount have a choice to pay 33 per cent for air-waves in 1,800 MHz band and 25 per cent for the 900 MHz band spectrum. Rest of the amount can be paid in 10 annual instalments after a moratorium of 2 years. The long term ECB shall be raised within a period of 18 months from the date of sanction of Rupee loans for payment of spectrum price. The successful bidders in 2G auction are also allowed to avail ECB under automatic route from their ultimate parent company without any maximum ECB liability-equity ratio subject to the condition that the lenders hold maximum paid-up equity of 25 per cent in the borrower compa-ny. The rules, now, also allow successful bidders to avail short term foreign currency loans in the nature of bridge finance under the automatic route for making upfront payment and replac-ing the same with the long term ECB. Before the November 2012 auction, telecom companies felt that banks are hesitating in giving loans following an increase in their debt, and the uncertainty prevailing in the sector after the Supreme Court cancelled 122 2G telecom licences in February, 2012.

JSW Steel on External Commercial Borrowings

Sudeshna Bhattacharya, F1

External Commercial Borrowing (ECB) is an instrument used in India to facilitate the access

to foreign money by Indian corporations and public sector units

(PSUs). These foreign currency borrowings can be raised within

ECB guidelines of Govt. of India/Reserve Bank of India and the

Ministry of Finance applicable from time to time. On 20th Feb-

ruary, 2012 JSW Steel decided to avail an external commercial

borrowing of $275 million with a green shoe option of $75 million at an interest rate of US$ Libor

+4% per annum.

The company has entered into an indicative, no-binding term sheet with an arranger for

the ECB. The term of the ECB is 5 years plus one day from the date of drawdown because legally

anything above 5 years is long term. The ECB will be utilized for one or more of the options

which include buyback of outstanding foreign currency convertible bonds, redemption of out-

standing foreign currency convertible bonds and/or capital expenditure. The lenders of the ECB

facility shall have the option to convert in whole or in part the outstanding ECB into fully paid eq-

uity shares of face value of INR 10 each, with full voting rights or GDRs with underlying equity

shares. The company has a total debt of about INR 21,500 Crores and foreign currency loans

amount to 55 per cent of its debt. On 1st June, 2013 JSW steel successfully merged with JSW Is-

pat. With the completion of merger, JSW Steel became the second largest steel producer in the

country after state-owned Steel Authority of India (SAIL) with 14.3 million tonnes capacity.

According to The Economic Times,-dated 29th October, 2013, JSW steel again planned to

raise around $600 million through ECB route in order to align rupee and dollar denominated

debt at around 50:50 ratio. This will also reduce the interest outgo of the firm through reduction

in average interest cost. As per the private steel firm, the average interest cost of the company

stands at around 8.25 per cent and post-fund rising, it will be reduced by around one percentage

point. By the end of September quarter, JSW Steel has a net debt of INR 30,435 Crores with a

debt to equity ratio of 1.44. While 39 per cent of the debt book comprises foreign debt, the rest

is in rupee terms. Meanwhile, JSW Steel said most of its loans are long-term in nature and it

doesn't have any repayment liability out of expiry of any short-term loan.

http://articles.economictimes.indiatimes.com/2012-02-21/news/31083029_1_ecb-external-commercial-

borrowing-jsw-steel

http://articles.economictimes.indiatimes.com/2013-06-03/news/39714934_1_jsw-ispat-steel-jsw-building-

systems-jsw-ispat

ONGC External Commercial Borrowing

Purnima Singh, F2

Oil India’s arm ONGC has been in headlines these days as it is eyeing for acquisitions

abroad coupled with large domestic capital expenditure.

It has investment commitment of Rs 20,000 Crores via

ONGC Videsh limited. It became very important for these

firms to raise money through external sources as govern-

ment itself is battling a high fiscal and current account

deficit, and is not in position to fund such mammoth re-

quirements. It is raising $250 million through the ECB

route for its on-going domestic capital expenditure plans, which stands at Rs 3,581crore for FY14.

ONGC also took the help of credit rating agency; Moody’s to get ratings done which would facili-

tate them to get ECB at competitive rates. ONGC got the issuers rating from Moody’s before go-

ing ahead with the external borrowing. ONGC got ECB at competitive rate of LIBOR + 3.5%.

There were concerns that ONGC would be exposed to foreign exchange risk when it has

taken huge dollar denominated ECB. But this kind of risk are hedged naturally for companies who

have a good share of revenues coming in foreign denominated currency, as well as assets

abroad. ONGC is one among them, as their overseas subsidiary, ONGC Videsh accounts for nearly

11 per cent of the consolidated revenue. It also has huge overseas assets, the value of which

translated into local currency will negate the impact on interest expenditure.

ONGC has been a stellar Indian PSU. Easing of norms by RBI has surely helped companies

to expand and diversify more. ONGC can use this window to expand its base and moreover as a

result of recent monetary policies this is a prudent step, rising interest rates makes it important

for companies to take the benefit of cheaper funds from abroad, this will not only help the com-

pany but also would augment the financial reserves of the country. This was the broader horizon,

which RBI kept in mind before easing ECB norms.

http://www.firstpost.com/politics/oil-india-to-raise-upto-900-mn-debt-to-fund-mozambique-buy-919801.html?

utm_source=ref_article

Corporate Column

Sai Nanthini. R.K, F2

To gain insights on External Commercial Borrowings (ECB's), we interviewed Mr. Ananda

Kumar, Branch Manager of State Bank of India (SBI), Chennai.

1. What does ECB's include? Who are the regulators?

External Commercial Borrowings (ECBs) include bank loans, suppliers' and buyers' credits,

fixed and floating rate bonds and borrowings from private sector through the multilateral finan-

cial institutions such as IFC, ADB, etc. and investment by Foreign Institutional Investors (FIIs) in

dedicated debt funds.

The department of Economic Affairs, Ministry of Finance, and Government of India with the sup-

port of Reserve Bank of India monitors and regulates Indian firms’ access to the global capital

markets. In India, ECB's are being permitted by the Government for providing additional source

of funds to Indian corporate and Public Sector Undertakings for funding expansion. The im-

portant aspect of ECB policy is to provide flexibility in borrowings by Indian corporate, but at the

same time maintaining prudent limits for total external borrowings.

2. Important change in Indian External Commercial Borrowing Guidelines

ECBs can be taken up under two routes:

Under the Automatic Route, an Indian company can apply with its local Indian bank for a per-

mission to avail an ECB, if certain parameters (interest rate/maturity) are met. If the parame-

ters are met, the necessary loan registration number will be issued within a few weeks.

Under the Approval Route, the Indian company has to ask RBI for a specific permission to

avail an ECB especially, if certain parameters are proposed to be exceeded. RBI will review

the application in detail and it usually takes few months before a decision is rendered.

Until September 2013, ECBs could only be availed for financing investments. It was especially

not allowed to take up an ECB for general corporate purposes, working capital and repay-

ment of existing INR loans. This has now changed, as RBI now permits Indian companies to

take up ECBs under the Approval Route from their foreign equity holders to finance “general

corporate purposes”. Still, some ambiguity exists with regard to the scope of the new relaxa-

tion. The Circular fails to distinguish the term general corporate purposes from the term

working capital.

3. How to Structure an External Commercial Borrowing in a Country like India?

In a country like India, where the interest on domestic bank loans is distinctly higher than

the overseas loan, there is a natural inclination by business houses to explore the possibility of

mobilising the funds through the External Commercial Borrowings (ECB) route to reduce the in-

terest burden. The eligibility criteria required for a company to avail ECB under automatic ap-

proval route, i.e. without seeking specific approval from the RBI are:

The funds should be borrowed for investment in new projects, modernisation or expansion of

existing production units, infrastructure sector, specified service sectors (namely, hotel, hospital,

software in India), overseas direct investment in joint venture or wholly owned subsidiaries.

The threshold limit of the ECB is the second criteria.

The third criterion is regarding all-in-cost ceiling. All-in-cost includes rate of interest, other

fees and expenses in foreign currency except commitment fee, pre-payment fee and fees paya-

ble in Indian rupees.

Insights from the Interview:

In India, External Commercial Borrowings (ECB) is an instrument used to facilitate the access

to foreign currency funds by Indian Corporates. The ECB policy focuses on three aspects:

1. Eligibility criteria for accessing external markets. 2. The total volume of borrowings to be raised and their maturity structure. 3. End use of the funds raised by the corporates.

Rates (as on 14th February, 2014) Percentage/Amount

Call Money Rate (Weighted Average) 8.90%

91-Days Treasury Bill (Primary) Yield 9.11%

364-Days Treasury Bill (Primary) Yield 8.97%

10 years Government Security Yield 8.83%

WPI 5.05%

CBLO (as on 20th February ,2014) 6.90-8.10%

Food Inflation 18.19%

Forex reserves (as on 28th February, 2014) US $ 293.7n Billion

IIP Growth (as on 10th January ,2014) 2.1%

Exports (January,2014 US $ 26.75 Billion

Imports (January,2014) US $ 36.66 Billion

CPI 8.79%

Economic Rollers

Simmy Kumari, F2

Source: Finance Mininstry , Office Of Economic Advisory, HDFC Securities Report, Ministry Of Com-

merce , RBI

Market Round-Up

K. Alekhya & Suma Sravya, F1 Suzuki plans US $488 million Gujarat plant to make Maruti cars and allow Maruti to focus

more on product development and marketing. The plant will initially produce up to 100,000 cars a year starting in 2017. (28th Jan, 2014 – Reuters)

Government plans to infuse Rs 11,200 Crores in PSU banks in FY15 according to Interim Budget 2014: This is to support PSU banks facing challenges in raising capital from the mar-ket because of rising non-performing assets (NPAs). NPAs of public sector banks rose 28.5 per cent to Rs 2.36 lakh Crores in September last year from Rs 1.83 lakh Crores in March 2013. (17th Feb, 2014 – BT).

Excise duty on small cars, motorcycles and SUVs was reduced: Excise duty on SUVs has been cut from 30 per cent to 24 per cent, in large, and for mid-segment cars it has been reduced from 27-24 per cent to 24-20 per cent. Excise duty on small cars, motorcycles and com-mercial vehicles cut from 12 to 8 per cent. (17th Feb, 2014 - ET).

Facebook buys WhatsApp for US $19 billion: The price US $19 billion dollars only including US $4 billion in cash and approximately US $12 billion worth of Facebook shares, and the remaining US $3 billion was restricted stock units to WhatsApp’s founders. This is the biggest tech deal in the world till date. (20thFeb, 2014 - ET).

FIIs pour Rs 11,000 Crores into debt market in February: FII inflows into debt are returning on account of the stability observed in foreign exchange and interest rates. (23rd Feb, 2014).

Loans set to get costlier as RBI raises repo rate by 25 bps: Reserve Bank Governor Raghuram Rajan on 28th of January, 2014 again surprised the markets and raised the key policy rate by 25 bps to 8 per cent in a bid to curb inflation, a move that may translate into higher EMIs and push up the cost of borrowing for corporates. (28th Jan, 2014 - ET).

KM Birla’s Aditya Birla Nuvo is in talks with a Private Equity consortium to sell its business process outsourcing from Minacs for US $250 Million. (BS) (22/01/2014)

AG gives clarity on Telco’s’ M&A Norms: India’s highest law officer (Attorney General of In-dia) provided clarity on merger & acquisition norms for mobile phone companies. It stated that companies that participate in the auction and who propose to merge; the lock-in period will be applied on the new shares issued to the transferee company.

Abu Dhabi Co to fire up JP’s two Hydel assets: Abu Dhabi’s flagship energy and utilities com-pany TAQA is set to acquire two hydropower projects in Himachal Pradesh from Delhi based Jaypee Group at an enterprise valuation of US $1.9-2.07 Billion.

RBI Column

Pawanpreet Kaur, F2

RBI decides to digitize its old records: To preserve delicate and brittle documents, RBI has decid-

ed to digitize its old records, which runs into 1.5 lakhs pages and make them available online. The

plan being:

Digitizing documents using state-of-the art scanning and meta-tagging methodologies and

subsequent archival of the same with robust online search and query facilities and in the

process, authenticating the available data.

Sophisticated handling technique for scanning old, delicate, fragile and brittle documents.

Easy availability of data/information to users online.

RBI is in favour of using PKI (Public Key Infrastructure) for payment security. PKI is a set of hard-

ware and software, which will enable internet users to exchange data and money using a pair of

public and private cryptography passwords securely and privately.

Transcending the realm of technology, cryptography systems can assist in non-repudiation

efforts.

No possibility of alteration in the message when in transit as sender’s private key with digi-

tal signature will disallow external interference.

RBI to check benchmark rate: The RBI is to check benchmark rate so as to empower the Central

Bank to regulate the fixing of benchmark in the wake of the LIBOR scandal in Europe. In wake of

initiatives taken by other countries, RBI has constituted a panel to suggest ways to determine the

integrity in the market rate.

RBI to issue binding directions to the benchmark administrators, calculation agents, sub-

mitters etc.

Will introduce specific criminal, civil sanctions; impose penalties for violations of its direc-

tions in order to ensure credibility of the benchmarks.

Calculation of the benchmark will be based on observable transactions.

Change in Rates by RBI:

The immediate impact of this increase in rates by RBI will be faced by end users or the retail custom-

ers in the form of higher EMIs on home loans, auto loans, as well as personal loans. Any increase in

interest rates would not impact auto loan market as much as it would impact home loan segment

because majority of the car loans are on

fixed rate basis compared to home loans,

which are generally offered on floating

rate basis. Real estate companies and de-

velopers already facing the brunt of slug-

gish sales will see further dampening of

interest in the real estate segment.

Particulars Existing In-

terest Rates

Changes

Bank Rate 9% Increased from 8.75%

Repo Rate 8% Increased from 7.75%

Reverse Repo Rate 7% Increased from 6.75%

MSF 9% Increased from 8.75%

Finance Buzz

Vyom Goel, F2

Credit Linked Note- The coupon or price of the note is linked to the performance of a refer-

ence asset. It offers borrowers a hedge against credit risk, and gives investors a higher yield

on the note for accepting exposure to a specified

credit event.

LIBOR- An interest rate benchmark used to establish

the floating interest rate that is paid on the notional

principal, in an interest-rate swap. It is the most com-

mon reference on which other interest rates are

based.

LIBOR Option Adjusted Spread (LOAS) - OAS is the

spread to a benchmark security or index, less the option cost.

Domestic Tariff Areas- Areas or zones those are located outside India’s SEZ and/or EOU.

Institutional Investor Index- The Institutional Investor Index is an indicator used to identify

and measure economic conditions of booms and crises. The Index is constructed by re-

questing survey responses from 75 to 100 investment bank research departments who pro-

vide evaluations of a particular country or countries.

Foreign Portfolio Investment - Securities and other financial assets passively held by foreign

investors. Foreign portfolio investment (FPI) does not provide the investor with direct own-

ership of financial assets, and thus no direct management of a company.

Odious Debt - A nation's debt becomes odious debt when government leaders use bor-

rowed funds in ways that don't benefit or even oppress the citizens.

Cooke Ratio - A ratio that calculates the amount of capital a bank should have as a percent-

age of its total risk-adjusted assets. The calculation is used to determine a minimum capital

adequacy standard that must be maintained by banks to cater for unexpected losses.

Airbag Swap - An interest rate swap whose notional value adjusts according to rising inter-

est rates by indexing the floating portion to a constant maturity swap (CMS).

Stock Market Analysis

Sooraj Kumar C. and Anwesh Jain, F1

The Indian Stock Market key index Sensex increased to 21120.12 points in February from

20513.85 points in January of 2014. Stock Market in India has an average of 6037.56 points since

1979 until 2014, reaching an all-time high of 21373.66 Index points in January of 2014 and a rec-

ord low of 113.28 Index points in December of 1979. The

daily growth percentage of the markets is 0.63%. Its week-

ly, monthly and yearly growth stands at 2.03%, 3.03% and

11.64% respectively, which points out to the fact that the

market is positive of the economy and looking towards a

bullish future.

The S&P BSE Sensex’s stood at 20,683.5 on January

28, 2014. There has been a growth of 2.1% since January

end till the markets closed at 21,120.12 on February 28th. Nifty has shown an upward trend of

2.5% in the same period. Tata motors, Axis bank, L&T, M&M, and Sun Pharma are the top picks

for the month where Tata motors has clocked a growth rate of 17.1%, Axis with 12.8% followed

by L&T. The story isn’t very good for others like NTPC (-11.2%), Sesa Sterlite (-11.2%) and

Hindalco (-7.7%), who have been branded the top losers for the month.

The next 2-3 quarters would remain a key challenge for the engineering companies as exe-

cution pace is slowing down due to internal as well as macro issues, margins have also come un-

der pressure due to rising commodity prices. Thus, unless the macro-environment improves

overall growth will continue to remain sluggish in the near term.

A clear mandate would be favourable for equities and it is likely that Sensex will touch

22,000 before elections. We have got to buy the right stocks and the favoured sectors and play it

that way. The markets are on a positive footing till at least the elections

Stock of the Month

Tata Motors

6 months Performance:

BSE - 43.68% bullish

NSE - 4.10% bullish

Market Cap: Rs. 1, 34,234.44 Crores

The stock has jumped 30% since August 2013, while average stock returns of other premium

car makers stood at just 2 per cent in the same period. India's largest automobile company is ex-

ploring the possibility of setting up a manufacturing plant for Jaguar and Land Rover in Saudi Ara-

bia. On 11Feb 2014, a new model was introduced by the Tata motors ltd which made a turning

point.

On 23 Feb 2014 Tata motors entered as the 7th blue chip company of Sensex, thereby increas-

ing the market cap from Rs. 5,814 Crores to Rs. 1,04,571

Finance Quiz

Srinivas Rahul Chaganti, F2

1. Which Indian Power Company is selling its two power plants to TAQA-led Consortium?

2. Which two Indian companies are joining hands with Air Asia to operate in India?

3. Who is the CEO of the Air Asia India Pvt. Ltd?

4. RBI has decided to permit eligible borrowers to

avail ECB under the approval route from their for-

eign equity holder company with minimum average

maturity of ____ years for general corporate pur-

poses.

5. Reserve Bank of India (RBI) set up the rule that no

airline will be allowed to raise more than US

$_____ Million through External Commercial Bor-

rowings (ECB).

6. Which is the Indian company which has borrowed

US $ 1.5 Billion through ECB in December 2013?

7. Which Bank raised $300 million through ECB under affordable housing plan?

8. Who is Yahoo’s new managing director for its Indian operations replacing Arun Tadanki?

9. Which Japanese Telecom Company is trying to exit from the Indian market by selling its stake

to Vodafone?

10. Which Company is buying Motorola Mobility Holdings Llc. from Google Inc. for Us $2.1 Bil-

lion?

Photo Find

Nilanjana Chatterjee, F2

1. 2.

3. 4.

5. 6.

Crossword

Samyuktha Reddy, F2

Across:

1. Which bank plans to raise $300 Million through external commercial borrowing?

2. Private carrier (airlines) said it will raise USD 300 million through the external commercial borrowing (ECB)

route to retire its high cost debt.

6. --------- It refers to a bond issued by an Indian company expressed in foreign currency, and the principal and in-

terest in respect of which is payable in foreign currency..

7. Under the --------- Route, the Indian company can apply with its local Indian bank for a permission to avail an

ECB if certain parameters (interest rate / maturity) are met.

9. The ECB should have an average maturity of at least ---years

Down:

3. Which company has paid foreign debt of Rs 3,100 cr on schedule?

4. The foreign lender should have a minimum direct stake (paid-up equity) of --------% in the Indian company

5. ---------means a bond expressed in foreign currency, the principal and interest in respect of which is payable in

foreign currency

8. Under the --------- Route, the Indian company has to ask the RBI for a specific permission to avail an ECB espe-

cially if certain parameters are proposed to be exceeded.

10. The maximum interest rate (including certain costs) that can be agreed between the Indian borrower and the for-

eign lender currently is 500 basis points over --------rate(6 months)

1 2 4 3

5

6

8 9

10

7

Answers for Photo Find:

1. Dr. Kamalesh Chandra Chakrabarty or K.C. Chakrabarty, Deputy Governor of RBI.

2. Sunil Bharti Mittal, founder, chairman and Group CEO of Bharti Enterprises

3. Akash Ambani, son of Mukesh Ambani who recently joined Reliance Jio Infocomm.

4. Logo of HDFC Bank

5. Ms. Usha Ananthasubramanian, Chairperson and Managing Director of Bharatiya Mahi-

la Bank.

6. Elon Musk, CEO & CTO of SpaceX and CEO & Chief Product Architect of Tesla Motors.

Answers for Crossword:

1. HDFC

2. Jet

3. Reliance

4. Twenty Five

5. FCEB

6. FCCB

7. Automatic

8. Approval

9. Seven

10. LIBOR

Answers for Quiz:

1. Jaypee group

2. Tata Son’s Ltd and Telestra Trade place PVT LTD

3. Mittu Chandilya

4. 7 years

5. 300

6. ONGC Videsh Ltd

7. HDFC

8. Gurmit Singh

9. NTT Docomo

10. Lenovo Group Ltd

NISHKA TEAMNISHKA TEAMNISHKA TEAM

Nishka is a monthly finance magazine brought by the students of the finance club of Christ

University Institute of Management, Kengeri Campus. The idea behind coining this issue of

the magazine is to establish a learning among the students, which helps them to gain an in-

sight about the world of finance.

Faculty Coordinator

Prof. Shrikant Rao

Coordinators

Niharika Shadra, F1

Niken Jain, F2

CHRIST UNIVERSITY INSTITTUTE OF MANAGEMENT, KENGERI CAMPUS

Please mail your valuable feedback/reviews to nishka@mba.christuniversity.in

(For private circulation only)

RBI Column

Pawanpreet Kaur, F2

Finance Buzz

Vyom Goel, F2

Market updates

B.S Sravya, F1

Katepalli Alekhya, F2

Economic Rollers

Simmy Kumari, F2

Stock Analysis

Sooraj Kumar, F1

Anwesh Jain, F1

Crossword

Samyuktha Reddy, F2

Quiz

Rahul Srinivas, F2

Photofind

Nilanjana Chatterjee, F2

Corporate interview

Sai Nanthini, F2

Designing

Krishnendu Kundu, F2

Niken Jain, F2

Editor

George P Job, F2

Neha Mishra , F2

Introduction

Upasana Gurung, F1

Article coordinators

Ashwathy Edison, F1

Sudeshna Bhattacharya, F1

Article writing

Kalyana KarthiK, F2

Purnima Singh, F2

Srijita Mukherjee, F2