Last year, Indian companies raised about $2 billion from international markets.

Firms have already raised nearly $3 billion through ECBs this year. The foreign loans include includes Reliance Infocomm's $250 million syndicate loan, Indian Railway Finance Corporation's $100 million loan, Exim Bank's $250 million bond issue, Bharat Petroleum Corporation's $107 million issue, as well as the issues of Ashok Leyland, Zee Telefilms, Bharti Cellular, National Hydroelectric Corporation and Power Finance Corporation.

On the cards are GAIL India's $150 million foreign bond issue, Housing Development Finance Corporation's $500 million borrowing, a leading public sector bank's $100-200 million loan to fund its foreign operations and ICICI Bank's $1 billion medium-term note issue, billed as the largest issue this year.

Apart from these, HDFC Bank is raising $75 million through a syndicated loan and ING Vysya Bank $50 million.

The appetite of Indian companies for foreign money has shot up this year despite the end-use restrictions on ECBs. According the present norms, companies can use ECBs only to fund capital expenditure and infrastructure development.

"Tapping the overseas bond market is a good option for those who have large requirement of funds," said S Sridhar, executive director, Exim Bank.

The bank raised $250 million overseas at 185 basis point over the US treasury rates. This gave the bank access to a new investor base, Sridhar said.

India Inc's appetite for overseas funds has risen as many entities are eyeing expansion or setting up large infrastructure projects.

Kausik Modak, principal and head (debt capital raising global markets group) Bank of America ( India) notes, "There is a large appetite for Indian paper as the country has demonstrated a growth rate of 8 per cent and has some great companies."

While some firms are sitting on the fence, weighing the opportunity cost of raising funds at a time when global interest rates are firming up, many have taken the plunge.

"Cost is not the only factor that influences the borrowing decision of a corporate. Soft benefits sometimes play a more important role," said Modak.

He is referring to companies gaining access to a wider investor base and establishing relations with new international banks as they go in for syndicate loans.

Bankers said entities that did not need to convert their overseas borrowings into rupees were the ones tapping the foreign currency market, as they could afford to keep the exchange rate risk open since they had dollar inflows.