The Reserve Bank of India (RBI) has limited
structures available to Indian high-yield issuers.
A November 25 notification clarified that Indian
companies cannot issue any direct or indirect liability or
offer security in any form for such borrowings by their
overseas subsidiaries or holding companies. The move may
negatively affect Greenko’s recent sub-investment
Indian high yield has become increasingly popular
in the past few months as domestic banks tighten lending. While
subsidiaries of well-known names such as Reliance and Tata are
familiar issuers in the market, more Indian corporates have
recently shown appetite for the asset class.
Some issuers have used innovative structures to bring
investors closer to Indian credits. There has never been a
default in Indian high-yield – although foreign
currency convertible bond restructures...