Russia-Ukraine Dispute Hampers the Onshore and Offshore Fund-raisings

As a result of the Ukraine crisis, the global financial markets have been volatile, and hence fund-raising by local firms and banks are probably going to get delayed. This week will be crucial in determining the timelines concerning local firms looking for funds.

Indian Railway Finance Corporation (IRFC) and Mumbai International Airport (MIAL) are the local companies attempting to raise global money through bonds or loans between $500 and $1 billion each.

Bank of Maharashtra has already postponed its share sale even though it has secured firm commitments from its investors. Also, a steel firm pursuing to raise up to $400 million in offshore bilateral/club loans is going slow too. After the Russia-Ukraine conflict, new issuances have dropped significantly. 

Several small to mid-sized issuances have been lined up in the financial sector. Due to the geopolitical tension, the local equity market has been highly volatile; thus, anticipated valuations may take more time. Bank of Maharashtra was raising up to Rs 750 crore via a share sale.

Some small finance banks and microfinance sector entities that raised equities during the IPO boom in the second half of the previous year may encounter fresh challenges in raising capital. Among small finance banks, Jana, ESAF, Utkarsh, and Fincare were raising funds via share sales.

For any clarifications/feedback on the topic, don’t hesitate to contact the writer at bhavana.pn@cleartax.in.

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