The Reserve Bank of India (RBI), has restored the norms for overseas investment by corporates which had been changed last year. The RBI has increased the borrowing limit subject to certain conditions. Corporates will once again be able to engage in any financial commitment up to 400% of net worth. This limit was reduced to 100% of net worth last year. However, any financial commitment exceeding US$ 1 bn or its equivalent in a financial year would require prior approval of the RBI. The RBI had in August 2013 reduced the borrowing limit to stem the fall in the rupee.
Aluminum stocks are trading mixed today. While Nalco is trading firm, Hindalco is in the red. As per a leading business daily, private Aluminum major Hindalco is planning to raise US$ 500 m (about Rs 30 bn) by issue of shares through qualified institutional placement (QIP). This is primarily to repay part of the company's debt. As of March 2014, Hindalco's debt stood at 1.4 times to its net worth. It is believed that the company might hit the market with its issue by next week with a floor price of Rs 168 per share. The company has asked CLSA to manage the issue. The latter expects the company's subsidiary Novelis to be a major beneficiary from the shift made by global automakers from steel to Aluminum, given it a strong franchise and better capacities. Hindalco is trading down 0.7% today.