IFR Outlook for Indian Borrowers Roundtable 2016: Part 4

Using Thomson Reuters proprietary data, we looked at all borrowing in the database by entities whose ultimate parent company was Indian and which had raised finance between January 2014 and June 2015 in the domestic and offshore bond and syndicated loan markets. The results, which were gathered during the third and early fourth quarters of 2015, were illuminating. Broadly speaking around 200 borrowers tapped the loan market and slightly more (225) accessed the bond market, with some (relatively limited) crossover. Total borrowing in...

David Rasquinha Export-Import Bank of India David Rasquinha is deputy managing director at Export-Import Bank of India responsible for project exports, trade finance, lines of credit, treasury and risk management. He has held a range of positions since joining the bank in 1985, serving as the bank’s resident representative in Washington, DC from 1999 to 2004. Rasquinha has also served on several working groups set up by the Reserve Bank of India.   Anjan Ghosh ICRA Anjan Ghosh is chief ratings officer at ICRA Ltd. He is responsible for...

IFR: What does the borrowing landscape look like for Indian issuers in 2016?   Vikas Halan, Moody’s: The demand and supply of credit in 2016 will be lower than 2015 and the Fed rate hike will likely alter the funding mix from more offshore to less offshore. As we saw in the last policy statement, higher Fed rates at a time when the global economy is not doing that well plus the need to protect the Indian economy led to that 50bp rate cut by the Reserve Bank of India in September 2015. If we extrapolate that, the Fed rate hike will probably...

IFR: What about appetite for high-yield from India?   Vikas Halan, Moody’s: One of the issues for high-yield issuers is the all-in cost ceiling, meaning they have to borrow within the 500bp limit set by RBI. That limits the overall universe to very few issuers in our high ‘Ba’ category, or you have issuers like Indiabulls and Lodha that used structures that are not captured by ECB guidelines. Those kinds of activities are also tied to investments overseas that don’t seem to be happening at the moment, which, in my view, is a little bit puzzling...

IFR: Interesting point. RBI has not allowed Indian banks to tap the Masala bond market, for AT1s. But they should probablydo that.   Sanjay Guglani, Silverdale Capital: Masala bonds are too hot for us. My investors are US dollar-denominated investors. If I were to buy NTPC bonds at 8%-8.5% and hedge I would make about 2%-ish. As of yesterday evening, NTPC’s July 21 bond was giving me 3.61%. I dare not go there. As Nipa said, there is appetite for long duration local currency bonds. And as correctly pointed out, the right people to do a Masala...