Three Indian companies raised over $2 billion in two weeks through depository receipts, indicating that foreign investor interest in Indian firms is rising. Sterlite Industries raised $1.5 billion through American Depository Shares, while Tata Steel and Suzlon announced plans to raise $500 million and $108 million respectively through global depository receipts. Analysts believe foreign investors see India as an attractive destination with limited other investment options. The successful fundraisings also show foreign institutional interest in investing in Indian companies rather than just reducing exposure to foreign currencies.

1. Foreign investor interest in Indian firms rising
July 21 , 2009
New Delhi: Three Indian companies have raised over $2 billion in two weeks through the depository
receipt route, strengthening belief that foreign investors are once again looking at Indian companies.
While metals major Sterlite Industries raised $1.5 billion through American Depository Shares (ADS) last
week, steel producer Tata Steel raised $500 million through a global depository receipt (GDR) issue.
Wind energy company Suzlon has also announced plans to raise $108 million by issuing GDRs.
"Foreign investors are finding India as an attractive destination. There are also not too many places left to
invest," said SMC Capitals equity head Jagannadham Thunuguntla.
"This can be seen not only through the recent successful ADS/GDR issues but also from QIPs (qualified
institutional placements) that companies resorted to," said Thunuguntla.
QIPs are capital raising tools through which companies allot shares or any other security to institutional
investors to raise funds. The money raised is in rupee denomination.
ADS and GDR are negotiable securities listed on another country's stock exchange. Subscription to the
same gives the company funds in dollars or some other foreign currency.
The recent success of both these fund raising routes indicates that Indian companies not only want to
reduce exposure to foreign currencies, but also the interest of foreign institutional investors (FIIs) in
Indian companies.
"Earlier, when QIPs became successful in June, everybody thought FIIs were reducing their exposure to
the dollar. But now with ADSs and GDRs also picking up, the interest seems to be in the companies,"
added Thunuguntla.
In further proof of a resurgence in the capital markets, fund raising in different modes of public offers,
rights issues and QIPs have substantially picked up.
It grew more than 13 times to Rs.9,408 crore for the quarter ending June 30 in comparison to Rs.664
crore in the quarter ending March 31. (IANS)