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Foreign currency woes

Companies that have borrowed in US dollars may face pressure due to rupee depreciation


Many businesses borrow in foreign currencies, such as the US dollar, to take advantage of ultra-low interest rates in the foreign markets. Such borrowing can be by issuing bonds or by loaning money from a foreign bank.

What looks like a smart move in the short term may come to haunt if the foreign currency appreciates with respect to the native one or the interest rates in the foreign market rise.

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The table below lists some Indian companies that borrowed in US dollars a couple of years ago. Because the rupee has depreciated since then, they now have larger loan amounts outstanding. The repayment is due in the next five months. Keep an eye on how these companies deal with the repayment. The companies with high debt on their books may, especially, face some pressure.

Company Amount borrowed ($ Mn) Borrowed on USD-INR rate Amount borrowed (Rs Cr) Maturity date Amount to be paid
(Rs Cr)
Increase in loan (%) Debt to equity
Radico Khaitan 15 29-Jul-11 44.2 66.3 31-Aug-18 101 51.8 0.78
OK Play India 7.6 29-Oct-10 44.4 33.8 31-Oct-18 51 51 2.16
Deepak Nitrite 18 31-Oct-11 48.7 87.7 30-Nov-18 121 37.8 0.78
Simplex Infrastructures 10 30-Sep-11 49 49 30-Sep-18 67 37 2.17
Asahi India Glass 10 30-Sep-11 49 49 31-Oct-18 67 37 2.45
TVS Srichakra 15 30-Sep-11 49 73.5 31-Oct-18 101 37 0.55
Commercial Engineers 12.4 30-Jan-12 49.8 61.7 31-Aug-18 83 34.7 -7.45
Nitco 8.7 30-Apr-09 50 43.7 31-Aug-18 59 34.1 -9.64
Polyplex Corporation 9 30/03/2012 50.9 45.9 31-May-18 60 31.7 0.45
Sundram Fasteners 15 30/03/2012 50.9 76.4 31-Oct-18 101 31.7 0.48
Motherson Sumi 18 28-Sep-12 52.7 94.9 30-Sep-18 121 27.2 0.22
Welspun Corp 30 31-Oct-12 53.8 161.4 30-Nov-18 201 24.7 0.82
SAIL 150 30-Oct-12 54 810.6 30-Nov-18 1006 24.1 1.15
Wipro 150 29-Mar-13 54.4 815.3 31-May-18 1006 23.4 0.14
Steel Strips Wheels 10.7 30-Aug-12 55.6 59.4 31-Aug-18 72 20.6 1.99
Aarti Industries 10 30-May-13 56.2 56.2 31-May-18 67 19.3 1.18
Heidelberg Cement 27.3 30-May-13 56.2 153.4 31-Aug-18 183 19.3 0.73
Datamatics Global 10 30-Jul-13 60.4 60.4 31-Jul-18 67 11.1 0.1
Godrej Industries 20 31-Jul-13 60.8 121.6 31-Jul-18 134 10.3 1.78
Endurance Technologies 10.5 30-Jan-15 61.9 65 31-Aug-18 70 8.3 0.13
Flexituff International 9 30-Dec-13 62 55.8 31-Dec-18 60 8.3 1.96
Sadbhav Engineering 10 30-Aug-13 66.1 66.1 31-Aug-18 67 1.5 1.07
Solar Industries 10 30-Aug-13 66.1 66.1 31-Aug-18 67 1.5 0.38
Fortis Healthcare 30 30-Aug-13 66.1 198.2 31-Aug-18 201 1.5 0.15
Data as on May 8, 2018

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