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Rupee marches towards 82: Here's a look at listed companies with the most exposure to foreign loans

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Rupee marches towards 82: Here's a look at listed companies with the most exposure to foreign loans

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As many as 71 companies (excluding banks and financials) from the BSE500 index had a combined foreign currency exposure to the tune of Rs 3.5 lakh crore at the end of FY22, as per data from ACE Equity. Sectors which have the highest foreign loan exposure are chemicals, refineries and healthcare.

With the rupee marching towards 82 per dollar for the first time, Indian companies with higher exposure to foreign currency loans will likely see their finance cost surging in the coming quarters.

As many as 71 companies (excluding banks and financials) from the BSE500 index had a combined foreign currency exposure to the tune of Rs 3.5 lakh crore at the end of FY22.


While the aggregate borrowings by these 71 companies stood at Rs 15.2 lakh crore as of March 2022, foreign currency loans accounted for 23 percent of their total borrowings, data sourced from Ace Equity showed.

Chemicals, refineries and healthcare sectors are dominating the list.
Companies like Glenmark Pharmaceuticals, Shipping Corporation of India, Oil India, ONGC, Adani Ports and SEZ and UPL have borrowed heavily in foreign currency.
Market participants believe that a depreciating rupee will increase total debt for these companies.

For instance, the gross debt of Glenmark Pharmaceuticals increased by 2.6 percent in the first quarter of FY23 to Rs 3,765 crore, as the rupee lost 4.6 percent during the quarter. Nearly 90 percent of Glenmark’s loans are in foreign currency.

“During this quarter also, the rupee moved substantially. So, that is mainly the reason why there is an upward movement in debt," V. S. Mani, CFO and Executive Director of Glenmark, said after the first quarter results. Also, we had refinanced FCCBs, he said.

According to Bloomberg, nearly $11 billion worth of foreign currency notes will mature over the next year. While bonds worth $500 million each are maturing in October for NTPC and BPCL, next year would see bonds of similar values getting matured for Vedanta Resources, IOCL and ONGC Videsh.

However, it’s important to note that many of these companies have substantial export revenues as well, thereby negating the impact of higher interest outflow due to dollar strengthening. Now, the revenues in export markets could be to a lot more markets and not necessarily denominated in dollars.
Alkyl Amines has Rs 23 crore of debt in foreign currency but Rs 270 crore worth of exports. UPL has about Rs 16,000 crore debt in foreign currency but Rs 36,067 crore in revenues from exports, out of which 7 percent is from Europe and 37 percent exposure is to North America.
Glenmark pharma has Rs 3,300 crore debt from foreign currency and Rs 6,726 crore of revenues from exports, and Sudarshan Chemicals, which exports to 80-plus countries, has almost Rs 1,000 crore revenue from exports versus Rs 481 crore of foreign debt.

Moreover, a greater impact due to currency depreciation would mostly see in those firms where the base currency is the US dollar. Even as the rupee has depreciated 9 percent against the US dollar between January and now, the local currency has gained 9.2 percent against the British pound and 5 percent over euro during the same period. Further, the hedging strategy placed in by each firm will also have a bearing on their interest outgo.

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