Regulation and Corporate Finance: Case of FCCB Issuances by Indian Firms

Abstract

Issuance of Foreign Currency Convertible Bonds (FCCBs) by Indian firms is regulated to a large extent by various agencies. We examine various aspects of prevailing regulations and analyze trends in issuance of FCCBs by Indian firms during 1993-2013 in light of these regulations. Market conditions, firm specific financing objectives and other factors that may influence capital raising activities have been addressed in many previous studies. This paper attempts to throve light on the influence of regulatory requirements on corporate financing in the Indian context. Regulators may like to re-examine these trends and frame future policies and issuers will also be able to evaluate appropriateness of FCCBs as a financing instrument in meeting their objectives.