Overseas fundraising by Indian Inc. falls sharply in FY23

28 Nov 2022 , 11:21 AM

Foreign currency loans raised by Indian companies plunged to USD 210 million in the second quarter of FY23. That’s down by 93.3% from last year when five companies raised $3.1 billion. The lowest Q2 was the lowest since December 2003, when Indian companies raised $191 million.

Volatility in currency markets, a sharp rise in interest rates in the United States and the availability of funds in India are the main reasons for the decline. According to reports, only two companies received funding in the September quarter. Due to this, the Indian currency is losing its value sharply against the US dollar and the Reserve Bank of India (RBI) has taken several steps to stop the fall of the rupee. In June 2022, 7 companies raised $1.69 billion in funding, while in March 2022, 13 companies raised $6.9 billion.

Another reason for the decline in demand for overseas loans is lower capital expenditures planned by medium and small businesses. According to the growth numbers of the index of industrial production (IIP), the growth of the manufacturing industry already faltered in August. The main reason for the slowdown is money supply, the Purchasing Managers Index (PMI), new orders, the US yield curve, US home sales and credit spreads point to further global slowdown.

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