Local corporates need new financing options. If
offshore debt capital markets are to be a solution, some
long-proposed reforms must reach fruition
Standard & Poor's is optimistic about Indian
corporates' ability to issue bonds internationally. Earlier
this year, the rating agency predicted that cross-border debt
offerings by local companies could nearly double to $25 billion
over the next few years.
It's a message that could buoy potential issuers, of which
there are many. In a country where corporates – and
public sector financial institutions – are now highly
leveraged, new sources of capital are needed.
The shortage of finance options has been appreciated for
some time. A Hundred Small Steps, a 2009 report on India's
financial sector reforms by the Committee of Financial Sector
Reforms, recommended removing restrictions on outflows by
corporates and individuals. It also suggested liberalising, and
then eliminating, restrictions on foreign investors'
participation in rupee-denominated debt, including corporate