We wrote in our last special report on India a year ago that regulatory reform would be the key to holding on to the development the country’s capital markets have enjoyed over the past few years. Reform did indeed come, albeit at a frustratingly slow pace and in patches when a blanket rejig to bring India’s capital markets up to international developed country standard was called for. Examples of impressive developments were the new Reserve Bank of India guidelines on offshore hybrid issuance which have created a potentially vibrant and long...Read more
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More than a decade and a half along its path of economic liberalisation, India has become a force to contend with in the global economy. Now, the Indian government and the country’s private sector are ready to work hand-in-hand in order to take that success to the next level, and ensure that India can never be ignored again. Savita Iyer reports.
In the aftermath of the bursting of the tech bubble sellside and buyside firms, charged with restoring the tainted reputation of research amid severe budget cuts, were forced to look elsewhere to do quality work at a low cost. India was their answer, and today, the business of investment research outsourcing has become a trend that experts say will only continue to grow, writes Savita Iyer.
The Indian equity-linked market has slowed to a dribble. Investors will no longer buy high-premium, non-hedgeable deals and local banks are just as reluctant to take on any more credit in the asset swap market. Deteriorating sentiment has killed India’s primary CB markets and bankers hope that issuer arrogance will be another casualty of the downturn. Jasper Moiseiwitsch reports.
The ratio of NPLs at Indian banks has remained stubbornly high for many years. Until recently lax provisioning rules put little pressure on banks to tackle problem loans aggressively and outdated regulations made doing so difficult. But a strong economy, healthy bank profits and a much-changed regulatory and legal environment has now created a liquid and vibrant NPL market, writes Luc Mongeon.
The Indian economy has grown at around 7%–8% in the past few years and loan volumes have risen at a similar rate but supply has been easily absorbed as banks, flush with liquidity, scramble to book assets. The scramble is such that pricing has been forced lower and lower with almost every new deal, says Prakash Chakravarti.
Indian banks look set to continue to tap the domestic bond market despite the RBI’s recent relaxation of the rules governing issuing hybrids in foreign currencies. While offshore markets offer depth, the all-in cost is not so appealing, writes Shankar Ramakrishnan.
Six months after the issuance of guidelines by the Reserve Bank of India, the Indian securitisation market is trying hard to limp back to normality. A few originators are trying to establish a familiar issuance pattern and are finding relative success, but there is still a need for more regulatory initiative to create a vibrant market. Shankar Ramakrishnan reports.
ICICI Bank recently pioneered the issuance of hybrid Tier 1 debt on international markets. Others are following but it is only the larger, well-known Indian names that will be able to successfully raise funds on overseas markets in the near-term, as regulatory hurdles still make this is a costly venture for most. Savita Iyer reports.
Few ECM bankers in India would be disappointed if the government’s privatisation of state-owned companies has ground to a halt posing a question mark over its reform programme. Such is the manic competition for mandates on government selldowns and so politicised is the atmosphere surrounding the process that it all boils down to one overriding factor – fees. Prakash Chakravarti reports.
Exim Bank can be credited not only with familiarising Indian issuers with the international private placement market, but most recently for forging a path to Japan. Cashing in on Japanese investors’ eagerness for “safe” debt instruments and its status as a quasi-sovereign entity, Exim Bank’s hugely successful ¥23bn issue has opened up a new financing venue for Indian issuers, writes Savita Iyer.