This Article is From Jan 12, 2015

BoAML Sees $100 Bn Forex Debt Raising by India Inc in 2 Yrs

BoAML Sees $100 Bn Forex Debt Raising by India Inc in 2 Yrs

Gandhinagar: Bank of America Merrill Lync (BoAML) India head has predicted a five-fold rise in forex debt raising by domestic corporates to a record $100 billion over the next two years.

As many as $21 billion was raised by Indian firms in foreign bond sales last year from a just $16 billion in 2013. This number can at least be $100 billion over the next two years, BoA-ML India Country Head Kaku Nakhate told the ongoing Vibrant Gujarat Summit here today.

In fact, we are thinking of smart cities which can easily be financed by appropriate instruments like municipal bonds and securitisation, she said.

Ever since the Modi Government assumed office in May- end, there has been a positive shift in foreign investor sentiment about Asia's third-largest economy even though that is not the case with other countries, Nakhate said.

India has come back on top of the minds of investors looking at emerging markets, she said, adding Prime Minister Narendra Modi's visit to the US last year was a "watershed" moment for him.

It can be noted that the consensus volume of money raised through overseas bond sales rose 20 per cent to a record $19 billion in 2014, according to many i-bankers, while the overall debt raising, including rupee bonds, touched $57 billion in the year.

Of the total, as much as $5 billion plus was raised by selling junk bonds (high-yield bonds).

Nakhate, heading the Indian arm of the Wall Street giant since March 2010, said mergers and acquisitions of and by domestic companies have been on the growth path and they have taken advantage of the funds available overseas.

On general outlook on the economy, she said India's future is "bright". This is the time for India, we have arrived."

She welcomed the changes in FPI (foreign portfolio investment) regulations, saying the move will attract new kind of inflows, beyond the conventional ones.