New Delhi, May 30: The country’s foreign capital inflow is likely to increase with companies planning to tap the global markets to take advantage of the relaxation in external commercial borrowing (ECB) norms.

“The relaxation in ECB rules imply that infrastructure companies, export-oriented firms and blue-chip firms will have greater access to the relatively cheaper overseas debt market to fund their domestic expansion plans,” Prakash P. Mallya, chairman and managing director of Vijaya Bank, told The Telegraph.

Among those who could make use of the revised norms are Tata Motors, which plans to raise around Rs 7,140 crore to finance its acquisition of Jaguar and Land Rover brands; Reliance Communications, which is planning to bid for South African mobile firm MTN; and GMR Infrastructure, which needs to raise around Rs 2,750 crore for the modernisation of the Delhi airport.

Essar Oil is looking to raise fresh debt of up to $5 billion through ECBs to fund its $6-billion capacity expansion programme.

“The company has received in-principle commitments from lenders for up to $4.3 billion,” said Naresh Nayar, managing director of the company.

ECBs are loans raised by companies from international markets with a maturity of three years or more.

Ashutosh Aggarwal, CFO (strategic finance) of GMR Infrastructure, said the relaxed borrowing norm would help reduce the company’s financing cost by 3-4 per cent and also offer better flexibility in planning the company’s debt structure.

Apart from increasing the ECB limit, the interest rate ceiling for overseas funds has also been hiked.

Companies can now raise funds for three to five years at a rate of 2 per cent higher than the London interbank offered rate (Libor) and at 3.5 per cent plus Libor for loans maturing beyond five years.