International Fund Raising

Issues & Options

May 31, 2010 Presented by : Jagannadham Thunuguntla,
Equity Head, SMC Capitals Limited

Fund raising through ECBs

Amount Raised (US$ Billion)

No. of ECBs: 680 Average : $37.93 Mn

No. of ECBs: 410 Average : $51.71 Mn

No. of ECBs: 539 Average : $24.10 Mn

No. of ECBs: 214 Average : $47.48 Mn

Funds raised through ECBs

* 2010 data is till April 2010

Fund raising through FCCBs

Amount Raised (US$ Billion)

No. of FCCBs: 75 Average : $100.33 Mn

No. of FCCBs: 20 Average : $74.23 Mn

No. of FCCBs: 19 Average : $195.87 Mn

No. of FCCBs: 5 Average : $98.01 Mn

Funds raised through FCCBs

* 2010 data is till April 2010

Fund raising through ADRs and GDRs

Amount Raised (US$ Billion)

No. of ADRs & GDRs: 15 Average : $175.79 Mn

No. of ADRs & GDRs: 4 Average : $26.12 Mn

No. of ADRs & GDRs: 13 Average : $264.94 Mn

No. of ADRs & GDRs: 9 Average : $23.76 Mn

Fund raised through ADRs and GDRs * 2010 data is till April 2010

FDI Flows in India: 2006 to 2010 YTD

Amount Invested (US$ Bn)

Year
Notes: Figures for 2009-10 are for the period April-December

FII Flows into Equity Markets: 2006 to 2009

Amount Invested (US$ Bn)

Notes: FII Flows into Equity Markets includes aggregate volume of Inflows

Overview of FCCBs
1. Convertible bonds denominated in foreign currency issued by listed Indian companies outside India 2. Conversion is not mandatory and the conversion price is subject to SEBI guidelines 3. Redemption 4. Coupon Rate 5. Yield to Maturity (YTM)

6. Venus Remedies : Winding-up Petition

7. Regulatory Framework:
a. FCCBs (with Mandatory conversion): FDI guidelines b. FCCBs (without Mandatory conversion): ECB guidelines

Overview of ECBs
1. Debt instruments denominated in foreign currency : Generally in USD, GBP, EUR, JPY or CHF 2. All-in-cost capping:
a. For maturity 3 to 5 years: LIBOR plus 150 bps b. For maturity above 5 years: LIBOR plus 250 bps

3. Refinancing of ECBs permitted if:

a. The fresh ECB is at lower cost b. Maturity period of repayment not changed

4. Though the coupon rate of ECBs prima-facie appears very less in comparison to the interest rate on the domestic bank loans, the borrowers have to carefully assess the terms of ECBs
a. Especially relating to the foreign exchange fluctuation risk

Introduction of FCCB Buyback

15th November 2008

Introduces Buy-back / Pre-payment of Foreign Currency Convertible Bonds (FCCBs)

FCCB Buyback : Automatic Route

Automatic Route
1. Buy back value of FCCBs should be at a minimum discount of 15% on the BV 2. Funds to be used for this purpose will be either existing foreign currency funds held or out of fresh ECBs

FCCB Buyback : Approval Route

Approval Route
1. Buy back value of FCCBs should be at a minimum discount of 25% on the BV 2. Funds to be used for this purpose shall be internal accruals; and 3. Total amount of buy back shall not exceed US$ 50 Mn

FCCB Buyback : Approval Route (Revised)

Approval Route revised

1. Total amount of buy back permitted shall not exceed US$ 100 Mn out of internal accruals, subject to: Min. discount: 25% @ Redemption value US$ 50 Mn Min. discount: 35% @ Redemption value US$ 50 75 Mn Min. discount: 50% @ Redemption value US$ 75 100 Mn 2. Recently, RBI issued notification to consider further buy back of FCCBs (only under approval route) till 30th June 2010

SMC Capitals : Thanks You!

Thank You
SMC Capitals Limited
Corporate Office 11 / 6 B, Ground floor, Shanti Chambers, Pusa Road New Delhi - 110005 INDIA Tel: +91 011 2582 6706/ 2586 3648 Fax: +91 11 2586 3606 www.smccapitals.com Services: IPOs, FPOs, Rights Issues, Buy Backs, Delisting, Open Offers, Private Equity, QIPs, FCCBs Debt Syndication, ESOP FBT Valuation / Implementation, M&A and Other advisory services For Merchant Banking Queries, Contact: Jagannadham Thunuguntla, Equity Head Mobile: 9312788860, 9312063677, Tel: +91 11 25826706, E-mail: jt@smccapitals.com Mumbai: +91-22-66651450-55, Chennai: +91-44-42088256
Disclaimer : This report is for information purposes only. Due care has been taken in compilation of the report to ensure that the
information is accurate to the best of our knowledge and belief. The information contained in the report has been obtained from reliable and publicly available sources. SMC Capitals Ltd, makes no representations or warranties regarding the accuracy or completeness of such information and expressly disclaims any and all liabilities based on such information or on omissions there from.