According to in-house counsel, industry associations,
ratings companies and private practice lawyers, regulatory
scrutiny in India has created more due diligence work for bond
issuers. However, as Indian deal volumes are due to grow in
2020 after a strong 2019, more attention needs to be paid to
bond covenants and documentation gaps.
Indian debt capital markets had a good year in 2019 compared
to previous years. More than $21 billion was raised by Indian
corporates in the international bond market, compared to $7.4
billion in 2018 and $13.1 billion in 2017.
"A lot of Indian paper was sold in 2019, which was driven
partly by regulatory changes," said Jitesh Shahani, partner at
L&L Partners. For example, Indian non-banking finance
companies (NBFCs) and banks are now allowed to raise foreign
currency-denominated bonds. Indian corporates are now able to
utilise foreign currency-denominated bonds to repay Indian
rupee-denominated loans, for working...