India Inc snaps up overseas assets worth $29.3 billion

India Inc snaps up overseas assets worth $29.3 billion

Declining trend of FY ’12, FY ’13 reversed

Outward foreign direct investment from the country, which was on slippery road during the past two fiscals, has seen some signs of recovery in the current fiscal with the total deal value touching $29.34 billion so far, says a report.

“The period between 2006-07 and 2010-11 has been buoyant at times for outward FDI investments, but there has been a slowdown since then. Investments declined in 2011-12 and 2012-13, but there has been a recovery in 2013-14 so far,” Care Ratings said in a report.

Total FDI investments made by domestic companies between April-January of 2013-14 stood at $29.34 billion, the report said. The declining trend in outward FDI started from 2010-11 when it stood at $19.25 billion to $11.18 billion in 2011-12, and to $7.13 billion in 2012-13.

The rating agency said after moderate FDI investment between 2002-03 and 2003-04, investments started gradually increasing because of the relaxations in overseas investment policy in 2004.

Outward investments by domestic companies picked up significantly since 2006-07 and peaked in 2008-09 with investment of $19.45 billion abroad, it said.

FDI is divided into three categories—equity, loans and guarantee issued. Most of the investments are made in the form of guarantee issued followed by equity, and lastly in the form of loans.

Out of the total investments made in the April-January period of 2013-14, $19.12 billion were guarantee issued, which accounted for 65.1 per cent, Care said. During the period, investment in equity and loans stood at $7.1 billion and $3.21 billion with a share of 23.9 per cent and 11 per cent, respectively. 

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