Indian companies raise US$6 billion through offshore bonds

This amount is also more than a quarter of the record US $22 billion raised in the entirety of 2021

January 18, 2022

International investors have strong confidence in the Indian economy despite looming global uncertainties

Indian market is detached from most emerging markets and is considered as a separate asset class as international investors seek to diversify their portfolios

India’s strong economic recovery and a stable sovereign rating has revived investor interest

Reliance Industries, SBI, JSW Infrastructure, Shriram Transport Finance, and India Clean Energy strengthened their funding cost by 30-35 bps from initial projections

Indian companies raised US$ 6 billion through sales of offshore bonds from January 1 to 14, compared to US$ 2.09 billion in 2021. This amount is also more than a quarter of the record US $22 billion that was raised in the entirety of 2021, indicating the confidence of international investors in the Indian economy despite looming global uncertainties. In addition, it has been observed that the Indian market is detached from most emerging markets and is considered a separate asset class as international investors seek to diversify their portfolios.

India’s strong economic recovery and stable sovereign rating have revived investor interest. As the global interest rates continue to remain low, issuers are taking advantage of investors’ renewed allocations for 2022 before the rate hike cycle starts.

Although the global bond market is weak due to economic contraction and inflation, a group of borrowers including Reliance Industries (RIL), State Bank of India (SBI), JSW Infrastructure, Shriram Transport Finance, and India Clean Energy strengthened their funding costs by 30-35 basis points (bps) from initial projections after receiving bids several times the offered size. For instance, JSW Infrastructure raised seven-year money offering 4.95%, which was 30 bps lower than the initial price guidance.