Long dormant Samurai loans back in favour for India Inc

By Anurag Joshi

Indian borrowers are seeking to reopen access to a funding channel that has remained dormant since the pandemic erupted.

NTPC Ltd., India’s biggest electricity generator, is planning to raise the equivalent of $750 million in a yen-denominated loan targeting a pool of Japanese lenders in general syndication. It’s only the second Indian borrower since January to seek such financing, after Indian Railway Finance Corp. kicked off a deal last week.


The coronavirus pandemic and measures to contain it have hit India’s businesses hard, and the central bank has forecast the economy will contract this year for the first time in more than four decades. That has hurt local borrowers’ ability to fund offshore, and access to yen loans would ease some financial strains.

Indian borrowers face foreign-currency debt maturities of at least $12.6 billion next quarter, after a spate of downgrades. The last Indian Samurai loan to close was a deal by hydro-power developer NHPC Ltd. in January.

Representatives at NTPC and IRFC didn’t immediately reply to requests for comment. In the absence of access to a wider pool of Japanese lenders earlier this year, some local companies raised yen loans via club deals with their relationship banks.