``There could be a direct 20 basis points to 50 basis points lowering in the overseas rate of borrowing for these companies.” One basis point is 0.01%.In fact Moody’s already upgraded the highest rated companies in line with the sovereign upgrade. Long term rating for Export-Import Bank of India, HDFC Bank, Indian Railway Finance Corporation Limited (IRFC), SBI, BPCL, HPCL, Indian Oil, and Petronet LNG were revised to Baa2 from Baa3, almost immediately.Indian companies are using overseas market to lower their borrowing costs as the Reserve Bank of India kept interest rates high to fight inflationary pressures. Indian companies and banks have sold $12.5 billion of foreign-currency bonds so far this year, 54 percent higher than year earlier, data from Bloomberg shows. Of this, more than a quarter was accounted for by banks.“The upgrade will result in PSUs, Banks and corporates take advantage of lower interest rates in global markets,’’ said Kaku Nakhate, India country head, Bank of America. These companies are likely to see marginal cost benefits when they will raise money from overseas markets,” Vaidya from DBS said.

Source: Economic Times November 17, 2017 15:33 UTC