Companies have to determine the most optimal method for funding these acquisitions as this has implications for the domestic balance sheets of the Indian companies and external debt profile depending on the source of funding.
In case of investments financed through debt in the books of domestic entity and/or against guarantees issued by the Indian entity, it could involve a full or partial recourse to the Indian entity. In case there is recourse to the company, it is a direct external liability of the company to that extent.