China companies' India arms raise ECBs to scale FDI wall

3-4 Chinese MNCs in process of issuing ECBs

by Natasha Nadkar

Several companies with China connections are raising funds through the external commercial borrowings (ECBs) route after the government tightened foreign direct investment (FDI) norms, as per a report in Economic Times. At least three-four Chinese multinational companies (MNCs) are in the process of issuing ECB instruments to parent firms based in China and more will follow. Currently, there are no restrictions on Chinese entities using the foreign portfolio investment (FPI) route. If the target company is listed, any FPI can own up to 9.99 per cent equity. However, if the company is unlisted of if the Chinese investor wants to take a bigger exposure, then unlisted nonconvertible debentures (NCDs) are the preferred option. However, the government does not have to impose restrictions on Chinese funds using the ECB or NCD route since they cannot take control of a company through debt instruments, according to experts.

References
1. https://economictimes.indiatimes.com/news/economy/finance/china-cos-india-arms-raise-ecbs-to-scale-fdi-wall/articleshow/76015125.cms
CMIE STATISTICS
Unemployment Rate
Per cent
9.1 -0.0
Consumer Sentiments Index
Base September-December 2015
42.7 0.0
Consumer Expectations Index
Base September-December 2015
44.9 +0.7
Current Economic Conditions Index
Base September-December 2015
39.4 -1.1
Quarterly CapEx Aggregates
(Rs.trillion) Sep 19 Dec 19 Mar 20 Jun 20
New projects 3.12 5.15 3.39 0.57
Completed projects 0.85 1.65 1.70 0.17
Stalled projects 0.41 0.61 0.77 0.11
Revived projects 0.43 0.83 0.42 0.53
Implementation stalled projects 0.90 0.15 9.30 0.07
Updated on: 10 Jul 2020 9:28AM
Quarterly Financials of Listed Companies
(% change) Jun 19 Sep 19 Dec 19 Mar 20
All listed Companies
 Income 4.6 -2.3 -1.7 -4.0
 Expenses 2.7 -3.1 -2.2 -0.9
 Net profit 17.5 -1.3 -11.1 -43.0
 PAT margin (%) 6.2 5.3 5.1 3.1
 Count of Cos. 4,486 4,445 4,407 2,650
Non-financial Companies
 Income 2.4 -6.3 -5.5 -8.1
 Expenses 1.6 -6.7 -6.4 -4.0
 Net profit -7.5 -13.5 -14.1 -46.0
 PAT margin (%) 6.3 5.8 5.7 4.2
 Net fixed assets 10.4 13.8
 Current assets 5.0 2.8
 Current liabilities 5.0 3.8
 Borrowings 8.4 14.9
 Reserves & surplus 6.0 4.3
 Count of Cos. 3,361 3,335 3,301 2,044
Numbers are net of P&E
Updated on: 10 Jul 2020 9:28AM
Annual Financials of All Companies
(% change) FY18 FY19 FY20
All Companies
 Income 8.3 13.2 4.3
 Expenses 9.8 13.4 2.8
 Net profit -39.9 20.7 15.0
 PAT margin (%) 2.0 2.4 10.3
 Assets 10.9 9.2 11.8
 Net worth 7.5 8.5 6.5
 RONW (%) 3.5 4.4 11.7
 Count of Cos. 26,220 24,732 364
Non-financial Companies
 Income 8.5 13.6 0.1
 Expenses 8.6 13.8 -1.2
 Net profit -8.7 23.5 4.6
 PAT margin (%) 2.8 3.2 12.7
 Net fixed assets 7.1 4.9 30.4
 Net worth 6.1 8.4 3.6
 RONW (%) 5.7 7.0 15.3
 Debt / Equity (times) 1.0 0.9 0.5
 Interest cover (times) 2.1 2.4 6.3
 Net working capital cycle (days) 77 69 -13
 Count of Cos. 21,415 20,146 258
Numbers are net of P&E
Updated on: 09 Jul 2020 7:12PM