Asian buyers make a beeline for Indian bonds

MUMBAI: Asian investors are outrunning their peers from Europe and the Middle East in the race to buy dollar bonds from Indian issuers, reflecting the South Asian nation’s ability to draw regional bankers that increasingly prefer New Delhi to Beijing as a destination for their surplus cash. Investors in the continent are now cornering a majority of the issues from India, influencing the pricing of securities.

Jain Irrigation’s debut issue of $200 million bonds in January is a case in point. About 90% of the investors in the issue were from Asia even though the company had no previous record of such a transaction. Similarly, NTPC’s $500-million investment grade issue was dominated by 68 per cent Asian investors, more than double the number of buyers from Europe and the Middle East.

“Previously, we used to announce the deal in Asia, wait for London to open and then start book building because the bulk of the demand would come from there. Now, there is so much demand in Asia that we do 70 per cent to 80 per cent of the book in Asia time. London opens and we just tell them the price…they have now become price takers,” said Amit Bordia, head of corporate finance, India, at Deutsche Bank