Govt says companies can now offer equity against all ECBs

New Delhi: The central government has permitted Indian companies to issue equity shares against all types of external commercial borrowings (ECBs).

The announcement permits Indian companies to "issue equity shares against all ECBs [excluding those deemed as ECBs] received in convertible foreign currency, subject to meeting all tax liabilities and procedures."

The types of ECBs that are eligible for such conversion include commercial bank loans, buyers' credit, suppliers' credit, securitised instruments, credit from official export credit agencies, commercial borrowings from the private sector window of multilateral financial institutions, as well as investment by foreign institutional investors in dedicated debt funds.