Too Little, Too Late ; Keeping in Mind the Cash Crunch Faced by Infrastructure Companies, the Government has Doubled the Ecb Limit to $100 Million. For All Other Companies, the Limit has Been Hiked From $20 Million to $50 Million. Higher Ecb Limits and Relaxed Fii Caps in Debt May Not Help.

Summary

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Nine months after the government put curbs on use of external commercial borrowings (ECBs), it wants to go easy. Keeping in mind the cash crunch faced by infrastructure companies, it has doubled the ECB limit to $100 million. For all other companies, the limit has been hiked from $20 million to $50 million.

Apart from allowing companies to raise more capital, the government also wants foreign institutional investors (FIIs) to invest more in the local debt markets. So, the FII investment cap in government securities has been raised from $3.2 billion to $5 billion and from $1.5 billion to $3 billion in corporate bonds.

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Extract

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Too Little, Too Late ; Keeping in Mind the Cash Crunch Faced by Infrastructure Companies, the Government has Doubled the Ecb Limit to $100 Million. For All Other Companies, the Limit has Been Hiked From $20 Million to $50 Million. Higher Ecb Limits and Relaxed Fii Caps in Debt May Not Help.

The government wants to ensure that corporates do not face a problem in raising capital. In A...

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