'Indian corporate bond issues face danger of saturation'
Indian corporate bond issues could face a lukewarm response from investors abroad as there has been a large number of issuances in the recent past, a top debt market expert observed here on Thursday.
By PTI |
MUMBAI: Indian corporate bond issues could face a lukewarm response from investors abroad as there has been a large number of issuances in the recent past, a top debt market expert observed here on Thursday.
"There have been a lot of issues very quickly and it is not necessary that the investors will have the ability and appetite for it...There could be a danger of saturation," Barclays' Capital FIG Debt Capital Markets Director Richard Grainger said on the sidelines of a FICCI conference here.
He, however, maintained that there was no need to panic and that there was some room for further issuance.
"It does not mean Indian banks would struggle to raise funds abroad...India is likely to overtake Korea as the largest bond issuer from Asia," he added.
In 2007 to date, India has raised six billion dollars abroad - 20 per cent of the total Asian issuance - compared to two billion dollars last year and a mere 200 million dollars in 2005, he said. The issuances this year make India second only to Korea in the Asian region.
"Fundamentally, there is no problem with the Indian paper...Indian borrowers should explore newer markets and currencies. You cannot borrow from the same investors every time," he said.
ICICI and State Bank of India have been the largest bond issuers in Asia raising upwards of two billion dollars.
Grainger suggested borrowing in euro, sterling, yen and in other Asian markets to meet the huge demand for capital. "They (Indian companies) should have a strategic and mature view on the debt-investor relationship," he said.
"India has come late but has become huge. Almost all issuances from India have been largely oversubscribed," he said, adding that the demand for bonds abroad was 10.5 billion dollars, compared to a supply of 2 billion dollars.
"There have been a lot of issues very quickly and it is not necessary that the investors will have the ability and appetite for it...There could be a danger of saturation," Barclays' Capital FIG Debt Capital Markets Director Richard Grainger said on the sidelines of a FICCI conference here.
He, however, maintained that there was no need to panic and that there was some room for further issuance.
"It does not mean Indian banks would struggle to raise funds abroad...India is likely to overtake Korea as the largest bond issuer from Asia," he added.
In 2007 to date, India has raised six billion dollars abroad - 20 per cent of the total Asian issuance - compared to two billion dollars last year and a mere 200 million dollars in 2005, he said. The issuances this year make India second only to Korea in the Asian region.
"Fundamentally, there is no problem with the Indian paper...Indian borrowers should explore newer markets and currencies. You cannot borrow from the same investors every time," he said.
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ICICI and State Bank of India have been the largest bond issuers in Asia raising upwards of two billion dollars.
Grainger suggested borrowing in euro, sterling, yen and in other Asian markets to meet the huge demand for capital. "They (Indian companies) should have a strategic and mature view on the debt-investor relationship," he said.
"India has come late but has become huge. Almost all issuances from India have been largely oversubscribed," he said, adding that the demand for bonds abroad was 10.5 billion dollars, compared to a supply of 2 billion dollars.
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