“It is like the critically ill patient in hospital. You never give up hope until the last minute,” said KR Kamath, chairman and managing director of Punjab National Bank, in referring to efforts to prevent stressed loans from becoming non-performing assets, a hot-button topic for India’s capital-constrained banking sector. “Revival of an asset is always desirable,” he said. Yet, Kamath, as head of one of India’s largest lenders, knows banks cannot afford to wait forever to recover their investme

Credit rating agencies operating in India are accustomed to surprises, having faced court injunctions over negative rating actions and countless disputes over unpaid bills. Even in this ultra-competitive industry, however, state-owned Bank of India’s landmark capital market fundraising in July 2014 caused a stir. BoI’s debut Rs25bn (US$406m) offering of Basel III-compliant Additional Tier 1 securities came with a Triple A rating from domestic agency Brickwork Ratings, with zero notching to refle

After a subdued couple of years, India’s domestic loan market is enjoying something of a revival. Dominated by project financing, the market has been a victim of policy paralysis ahead of this year’s elections, but green shoots have surfaced in key sectors such as ports, power and roads. With the pro-reform Narendra Modi government in power, market participants are confident that stalled projects stuck will soon be restarted and financings will fall back in shape. Since June, when the new govern

Offshore loan volumes from India are rebounding as positive sentiment among foreign investors allows borrowers to push for lower pricing. The momentum generated following the installation of a new government led by pro-business Prime Minister Narendra Modi spells great promise for the Indian economy and the business environment as a whole. India Inc is enjoying better equity valuations, with the Bombay Stock Exchange Sensex index regularly testing all-time highs, and foreign bond investors have

From the launch of electronic trading platforms to the first global rupee bonds, India’s local currency debt market has taken on new breadth this year. Yet, it still appears to be caught in a trap. While foreign interest in the Indian debt markets has surged, corporate bond volumes remain stunted. From January to September, net foreign investment in local debt amounted to a record Rs118.3bn (US$19.3bn), a marked turnaround from 2013, when foreign investors sold a net Rs50.8bn of Indian debt. Tot

The general election victory of Narendra Modi and his BJP party in May delivered the promise of reform in Indian politics and the lifting of the policy gridlock that had stymied growth over the final years of the Manmohan Singh administration. Offshore Indian debt issuance has picked up, as a result, and the hope is that a new era for Indian bond markets has begun. An impressive US$6.8bn has printed in the offshore India market since Modi’s victory, according to data from Thomson Reuters, with a

Having set an ambitious target of mobilising US$1trn of infrastructure investment in 2012–17, India has been busy expanding its range of financing options in the last two years. Among measures already taken to strengthen infrastructure financing are the establishment of Infrastructure Debt Funds (IDFs), credit enhancements of corporate bonds for infra projects, deepening of the local bond market, expansion of debt limits of foreign investors to buy long-term infra bonds and changes in the archai

It is hard to envisage a more resounding political endorsement from any diverse pool of stockholders, let alone India’s notoriously skittish investor community, but when the scale of Narendra Modi’s win in India’s general election became clear in early May, domestic and foreign institutional investors rushed to snap up shares in locally listed firms. In the month after the landslide victory that elevated the former Gujarat governor to the position of prime minister, India’s flagship stock index,

The rush to raise new-style bank capital picked up globally in 2014, as more countries began to phase in Basel III capital regulations. In India, the first Basel III-compliant capital instrument was sold within the first three months of the new regulations coming into force, but a promising start has since given way to some tough questions. India began the transition to Basel III on April 1 2013 and, in June the same year, state-owned United Bank of India printed a Rs5bn (US$81.68m) 10-year Tier

The India of late-2014 is almost unrecognisable from the morose, abject country of a year ago, when high inflation and elevated twin deficits were sapping international confidence. Today, the national capital, Delhi, hums with political change, while the country’s economic fulcrum, Mumbai, is infused with confidence for the first time since the financial crisis. Investment bankers, lawyers, and accountants busy themselves for a new rush of blockbuster stock offerings. Domestic share prices regul

What happens next will determine the direction of India’s economy over the next five, or even 10, years. If Modi’s government can follow through on its promises to energise Indian business, the potential is clearly enormous. But India’s bureaucratic red tape is world renowned, and even a powerful public mandate risks becoming bogged down by vested interests and byzantine regulatory structures. In many ways, the capital markets are on the front line of this intriguing battle. Improving the flow o