A Foreign Currency Convertible Bond (FCCB) is a type of convertible bond issued in a currency different than the issuer's domestic currency.
Himachal Futuristic Communications Ltd converted 64 foreign currency convertible bonds of $ 50,000 each into 58,70,769 shares of Rs 26 each.
The easing of external commercial borrowing (ECB) norms by the Reserve Bank of India (RBI) is expected to significantly boost overseas fundraising by Indian companies, market participants said.
While ECBs are pure loans, FCCBs have an in-built option for the lender to convert them into equity of the companies on maturity. Both in ECB and FCCB, till maturity, the borrower is expected to make interest payments on the amount borrowed. Incidentally, the AAR ruling of October 10 had been sought by a non-banking finance company. Till October 31, NBFCs were not allowed to borrow funds from overseas in foreign currency.
India said on Thursday domestic firms would be allowed to prepay existing foreign currency convertible bonds up to September 30, 2003.\n\n\n\n
Mid-sized Indian IT companies are increasingly adopting the Foreign Currency Convertible Bonds route to raise funds.
The government has decided to do away with the various classifications of foreign investments for the purpose of calculating foreign investment in downstream companies.
SpiceJet Ltd., an Indian budget airline, will likely to sell a foreign currency convertible bond worth $90 million by early September to raise money for more plane purchases, a company executive said Wednesday.
The International Finance Corporation, the private sector arm of the World Bank Group, will invest $15 million in a foreign currency convertible bond issued by Ballarpur Industries Limited.
Importers are rushing to hedge their dollar positions amid the sharp depreciation of the rupee against the American currency and expectations of further volatility even as exporters are holding off after suffering mark-to-market (MTM) losses on earlier hedges.
The Foreign Investment Promotion Board is believed to have cleared Zee Telefilms' plan of raising $100 million as foreign currency convertible bonds subject to the condition that the company brings down total foreign shareholding to 26 per cent
Defending the new foreign investment guidelines released this week, commerce and industry minister Kamal Nath said on Friday the norms would not distinguish between different forms of foreign capital.
Promoters or issuers of foreign currency convertible bonds may be allowed to buy back the bonds if they go in for prepayment.
Jindal Strips is believed to have struck a deal with the overseas private investors for picking up about 10% equity by acquiring its $15 million foreign currency convertible bonds listed at the Luxembourg Stock Exchange.
Facing huge redemption pressure on funds raised via foreign currency convertible bonds (FCCBs), India Inc has requested the Reserve Bank of India (RBI) to allow companies to offer higher interest rates on fresh foreign currency loans or bonds, the proceeds of which will be used to pre-pay existing FCCBs.
Tata Steel and Anil Ambani-led& Reliance Communications raised $1.375 billion through overseas borrowings and convertible bonds in September, according to data released by the Reserve Bank of India. Tata Steel, which early this year acquired Anglo-Dutch firm Corus to become the sixth-largest maker of the alloy, raised $875 million for overseas acquisition through foreign currency convertible bonds.
The rupee's fall is likely to put company promoters who raised money through foreign currency convertible bonds (FCCBs) in a spot.
Embedded redemption premium and 36 per cent depreciation in five years will realise forex losses worth Rs 67.2 billion.
Indian companies had raised $2.39 billion from foreign markets in May 2015.
Deccan Chronicle Holdings Ltd on Tuesday said it has launched $54.02 million foreign currency convertible bonds offering.
What could compound the problem is that many of these firms do not account for the debt. In other words, they are not providing for the borrowings on an annual basis over the life of the instrument. According to a study by a leading brokerage, accounting for the loan and the interest would, on an average, knock off at least 12 per cent of the profits in FY09 and about 10 per cent in FY10.
There are few deals where the buyer and the seller both walk away happy. The SpiceJet deal is one, where each side had a price point for reference.
Auto major Tata Engineering has raised $90 million with a greenshoe option of $10 million by issuing foreign currency convertible bonds.
Indian firms raised the money via external commercial borrowings.
Foreign currency convertible bonds (FCCBs) are proving to be a double-edged sword with large premiums simply vanishing on account of bear markets and the ghost of redemption at yield-to-maturity (YTM) hanging on.
The government on Wednesday said it is contemplating relaxing norms governing external commercial borrowings to enable Indian corporates access higher foreign capital at low cost.
Experts say that until the market bounces back to a respectable level and creates confidence among investors, who could look forward to some price appreciation, IPOs will not be successful.
State-owned Life Insurance Corporation (LIC) on Thursday entirely subscribed to the Rs 5,000 crore bond issue of Adani Ports and Special Economic Zone (APSEZ) at a coupon rate of 7.75 per cent, said sources privy to the development.
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