Financial companies dominate in April overseas borrowing

In April, financial services firms led overseas borrowing with $1.88 billion, constituting 44% of India's total external commercial borrowings (ECB) amounting to $4.28 billion for the month, per RBI data. Non-banking finance companies (NBFCs), advised by the RBI to diversify funding, increasingly utilize ECBs to reduce reliance on domestic banks. Muthoot Finance topped the borrowing list with $750 million, followed by Dhamra LNG Terminal at $600 million, Oil India at $550 million, REC at $393 million, and Hero Fincorp at $250 million. ECBs offer cost advantages, with corporates borrowing at rates linked to benchmarks like SOFR plus 200-300 basis points, typically lower than Indian bank rates.