Business

Infra companies looking to East

HYDERABAD: Many infrastructure companies are planning to adopt ‘look-east’ policy for attracting foreign investments. While the enhancement of cap on external commercial borrowings (ECBs) to $500 million from $100 million has been described as a positive step, there is a general feeling that this should have been done at least a year ago. The difference in interest rates between Indian banks and financial institutions and the foreign investors is sure to propel investments. They are, of course, somewhat sceptical about the companies attracting investment from the West what with the economic slowdown and insolvency or takeover of investment banks such as Lehman Brothers, Merrill Lynch, and Goldman Sachs.

The companies, which have not completed their financial closure for long-term projects, can look forward to investments from foreign investors, according to R. Balarami Reddy, Chief Financial Officer of IVRCL Infrastructure and Projects.

He feels that there is an opportunity still for companies to attract investments from investors in the West, while the Chief Investment Officer of another infrastructure major expressed his doubts. He has strongly advocated the ‘look-east’ policy.

Y. D. Murthy, Executive Vice-President (Finance) of Nagarjuna Construction Company (NCC), feels that investments can come in from Japan and Asia-Pacific nations. He said in an e-mail interview on Tuesday: “Allowing the corporate to pay higher interest rates on borrowing funds with a maturity of over seven years will make the lending attractive for the lenders and will result in easy fund access for the borrowers.”

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