India 2008 league tables

India stands on the threshold of economic greatness, if only it can ride out the global credit squeeze and overcome an innate desire to regulate itself out of international competitiveness. Economic growth remains robust but may slow to a credible 7.5%-8% this year despite the wider global slowdown but, like elsewhere in the region, inflation poses the biggest immediate threat to prosperity. Strong commodity prices are feeding through the supply and production chains and sharply higher food prices have given this year’s bout of inflation a...

Reliance Petroleum’s US$500m loan, signed in April, illustrates the group’s appeal. In the middle of a global credit crunch, Reliance Petroleum secured a seven-year loan with no fewer than 19 banks at the MLA level – a telling sign of its popularity. “The biggest reason [for taking part] was the profile of the deal,” said Tajinder Singh Setia at ABN AMRO in India, one of the 19 MLAs. “The fact that it was from the Reliance group ensured wider participation.” The loan will finance the second phase of a 580,000 barrel a day refinery in Jamnagar...

In 2007, India’s largest papermaker Ballarpur Industries (also known as Bilt) bought a Malaysian company, Sabah Forest Industries, for US$261m. It was a distressed asset, purchased from the Lion group. It was a potentially transformational transaction for Bilt because it gave it access to pulp and fibre, a more scarce resource in India than in Southeast Asia. Sabah Forest operated the largest pulp and paper mill in Malaysia, alongside a concession for 289,000 hectares of forestland from the state government of Sabah, valid up to 2094. The...

"The primary reasons why CB issuance volumes from Indian companies have dwindled this year are the current market environment and the Indian regulatory framework." said Anandh Haridh, director, ECM, at Merrill Lynch. "It is a difficult year for investors as well and as a result there is appetite only for some issues at terms that are reflective of the conditions. Still, this is a process of mean reversion of cost of capital. Companies will over time understand and adjust to that and pipeline will build again, maybe more selectively to begin...

Against this backdrop the Securities Exchange Board of India (Sebi) has been unrolling a slew of market-friendly measures to help revive the market. Crucially, it has revised the floor price formula for the pricing of qualified institutional placements (QIP) and preferential allotments to institutional investors. Preferential allotments to promoters will still be subject to existing guidelines. The floor price is now based on the two-week average stock price preceding a board meeting to open the QIP. In the past, it was based on the higher of...

India’s bond issuance in G3 currencies has been non-existent this year having broken all-time highs last year, building on steadily increasing volumes over the past four years. The reason for the failure to issue this year has been extreme risk aversion towards Asian credit among global investors, with only quasi-sovereign or investment-grade deals, principally from South Korea or Hong Kong, getting away. And while India is investment grade and its larger banks rated at the sovereign ceiling, it would be true to say that of those Indian issuers...

Loan markets have been the biggest beneficiaries of India Inc’s push overseas to acquire assets. Almost every acquirer, including risk-averse companies such as IT bellwether Wipro, borrowed in the loan markets last year to fund their overseas forays, leading to record volumes of around US$41.84bn in loans from India in 2007, according to Thomson Reuters data. Although year-to-date loan volumes stand at nearly US$22bn, there have been only a small number of acquisition financings, which is in stark contrast to last year, when most transactions...

Substantial reforms to the country’s capital and labour markets are the key to India achieving its infrastructure goals, at least according to International Monetary Fund (IMF) senior adviser Kalpana Kochlar, who recently outlined what steps the fund believes to be taken if the country is to meet its ambitious investment targets. Kochlar laid out the task ahead with stark numbers. Over the past three years, India has invested an average of 4.5% of its annual GDP on infrastructure development, which is half of the 9% of GDP that India’s Planning...

The main reasons people are excited about the Indian economy are its size, its rapid growth and the fact that some sectors of its economy have become truly world class in pretty quick time. Let us start with its size and fast economic growth rate. India is already the world’s fourth-largest economy when measured in purchasing power parity terms and Goldman Sachs in its recent “Brazil Russia India China (BRIC) Report” predicted India would become one of the world’s three largest economies in absolute terms by the 2032. And Goldman Sachs is not...