As Indian banks stagger under a wave of business defaults, some in Mumbai are hoping that their crisis could have the side-effect of catalysing a long-stagnant corporate bond market.
Indias securities regulator last week suspended issuances of offshore rupee-denominated masala bonds, arresting the growth of the new asset class. The abrupt move was prompted by a surge of interest in Indian corporate bonds, in which foreign investment was on the verge of breaching the regulatory limit.
These inflows are part of a broader trend of expansion in a market that has long been viewed as a laggard in India. In the financial year ending in March, issuance of corporate bonds hit Rs6.7tn ($104bn), more than double the figure five years before….
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