Solution

ECBs can be raised as: 1. Loans -E.g. bank loans, loans from equity holder, etc. 2. Capital market instruments, E.g. floating rate notes / fixed rate bonds / securitised instruments, non-convertible, optionally convertible or partially convertible preference shares, FCCB* and FCEB** 3. Buyers’ credit / suppliers’ credit 4. Financial lease * A foreign currency convertible bond (FCCB) is a type of corporate bond issued by an Indian company in an overseas market in a currency different from that of the issuer. Investors have the option of redeeming their investment on maturity or converting the bonds into equity any time during the currency of the bond. The repayment of the principal is in the currency in which the money is raised. *In case of a foreign currency exchangeable bond (FCEB), investors have the option of converting the bonds into equity of the offered company.The company issuing FCEB shall be part of the promoter group of the offered company and shall hold the equity shares being offered at the time of issuance of FCEB.