All tied up
A dysfunctional political environment, serious infrastructure bottlenecks and poor investor sentiment have slammed the brakes on India’s economic growth.
Source: Reuters/Vivek Prakash Youths tug at a rope line used to fasten a cargo ship, which ran aground, to the shore in Mumbai This year’s IFR India Special Report comes at a challenging time for Asia’s second-largest economy. Many of the issues that were already brewing 12 months ago have snowballed into serious problems, and confidence is wearing thin. To see the digital version of this report, please click here. India’s long-term potential remains enormous, as any capital markets participant would readily agree. The growing consumer...Read more
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A dysfunctional political environment, serious infrastructure bottlenecks and poor investor sentiment have slammed the brakes on India’s economic growth.
The rupee’s 25% slump against the US dollar in 12 months is an alarming illustration of India’s waning global appeal. The volatile currency is making it tough for India’s importers and exporters, while forex markets do not see a reversal any time soon.
India’s domestic debt capital markets should present tantalising opportunities for underwriters and investors, as an increasing number of companies look to diversify away from bank loans. Progress, however, has been frustratingly slow.
Indian banks have returned to the offshore bond markets in recent months, but corporate issuers remain locked out due to a falling currency, warnings of a credit downgrade and rising credit spreads. What will it take to bring them back?
India faces mounting pressure to break the habit of rolling over bad loans and agree to some painful restructurings before toxic debt becomes a systemic problem for its banking sector.
The Indian Government’s target to make divestments of Rs300bn (US$5.4bn) for this year is looking increasingly ambitious with the stalling of more state selldowns.
Indian companies have had to adjust their expectations for foreign currency funding, as European banks pull back and lenders fret about India’s economic outlook. Recent deals, however, have set a new benchmark for others to follow.
Indian issuers have largely addressed this year’s mountain of redemptions and the convertible bond market is open again.
Anil Rustogi, president of Aditya Birla Nuvo, talks to IFR about the company’s funding strategy.