MUMBAI: External borrowings of Indian companies fell by 41.3 per cent to $ 1.46 billion in May this year compared to the same month last year, according to the Reserve Bank data.

Indian firms had raised $ 2.49 billion by way of External Commercial Borrowings (ECBs) and Foreign Currency Convertible Bonds (FCCBs) in May, 2013.The borrowings were higher at $ 3.2 billion in April, 2014.

“I think it’s a combined effect of political uncertainty (as May was the election month) and rising global interest rate cycle on the domestic investment sentiment. Relatively higher interest rates abroad have made external borrowings costlier and that also might have acted as a dampener,” Bank of Baroda Chief Economist Rupa Rege-Nitsure said.

As many as 47 companies raised $ 536.32 million from the automatic route during the month, while a 20 firms raised $ 923.88 million from the approval route, showed RBI data.

Among the major borrowers from overseas markets in May were Rural Electrification Corp, General Motors India, Mylan Laboratories, Balkrishna Industries, Hospira Healthcare, India Gateway Terminal, and IPCA Laboratories.

In the approval route category, state-owned Rural Electrification Corporation Limited raised $ 250 million for sub-lending for a period of five years.

General Motors India raised $ 244.50 million for general corporate purpose (11.8 years) and Mylan Laboratories borrowed $ 200 million for general corporate purpose (8.2 years).

In the automatic route segment, Balkrishna Industries borrowed a sum of $ 100 million (4.3 years) for refinancing of earlier ECB and Hospira Healthcare India raised $ 150 million (6.3 years) for import of capital goods.

Among others, India Gateway Terminal raised $ 20 million, 20 million and 10 million in three separate tranches for refinancing of earlier loan each for a period of 7.1 years.

IPCA Laboratories borrowed $ 20 million for modernisation (5.1 years); Jindal Ploy Films $ 16 million for new project (5.6 years) and Mercator Limited raised $ 16 million for import of capital goods.