India’s shadow banking crisis and revitalized bankruptcy process are creating new opportunities for Deutsche Bank AG as it steps up lending to cash-strapped tycoons and for purchases of distressed assets, Bloomberg News reported. The German lender is seeing three times the volume of financing deals compared with 2018, when the shadow banking problems erupted, according to Rahul Chawla, the head of global credit trading at Deutsche Bank’s India unit.
India
State Bank of India has agreed to proceed with a restructuring proposal by wind power firm Suzlon Energy Ltd., a senior banker familiar with the matter told BloombergQuint on the condition of anonymity, BloombergQuint reported. The decision was taken by the bank’s board after a series of meetings last week. Suzlon, which owes banks Rs 11,300 crore, had proposed to split its debt into a sustainable and an unsustainable part. The company sought to convert Rs 7,700 crore in debt into convertible debentures, which would be held in the investment books of banks.
UK steel magnate Sanjeev Gupta has completed the acquisition of a bankrupt Indian steelmaker after a long court battle, the first foray by his GFG Alliance into the country’s fast-growing market following previous failed attempts, the Financial Times reported.
Indian mutual funds are carving out their investments in troubled Vodafone Idea Ltd.’s debt into separate portfolios as they seek to limit any fallout from a possible default by the telecom carrier, Bloomberg News reported. UTI Mutual Fund and Nippon Life India Asset Management moved to ring-fence their holdings in Vodafone Idea’s debt on Monday after credit assessor Care Ratings Ltd. downgraded the carrier’s borrowings, statements from the companies show. Last month, Franklin Templeton Mutual Fund also segregated the company’s debt.
India’s top court rejected a plea by mobile carriers seeking more time to settle billions of dollars in back-fees, threatening to push Vodafone Group Plc’s beleaguered local venture to the brink weeks after it warned of a potential collapse, Bloomberg News reported. The Supreme Court’s three-judge panel, headed by Arun Mishra, said Friday that operators including Vodafone Idea Ltd. and Bharti Airtel Ltd. -- owing a total of $13 billion in dues for spectrum and licenses -- must deposit the dues by March 17. Shares of Vodafone Idea plunged.
Indian tycoon owners of bankrupt companies are being told their assets aren’t off limits, Bloomberg News reported. Weeks after India’s criminal enforcement bureau announced a second auction of the prized personal possessions of fugitive jeweler Nirav Modi including his favorite watch and his Rolls Royce Ghost, the U.K High Court recently asked Anil Ambani to deposit $100 million of his personal wealth to partially pay back debt due to a trio of Chinese banks. The rush to collect on the assets includes a swoop on Vijay Mallya’s French island mansion and yacht by Qatar National Bank.
New measures by New Delhi designed to encourage banks to boost lending and take more risks are unlikely to revive anaemic credit growth in Asia’s third-biggest economy, industry observers have warned, the Financial Times reported. The Reserve Bank of India on Thursday eased new lending for cars, residential housing and small businesses and introduced a $14bn facility that allows commercial lenders to borrow more cheaply from the central bank.
After Finance Minister Nirmala Sitharaman, while presenting Union Budget 2020 on 1st February, said the government has asked the Reserve Bank of India (RBI) to extend the debt restructuring window by another year ending March 31, 2021, RBI in its Monetary Policy Review Meeting today said that it would be extending the scheme to 31st December 2020, Mint reported.
India’s real estate financiers surged after the central bank relaxed conditions to set aside cash for loans offered to small businesses or to fund individuals’ purchases of homes and vehicles, Bloomberg News reported. The Reserve Bank of India also allowed banks to continue to treat as ‘standard’ defaulting loans to commercial real estate borrowers if the repayment delays were due to reasons “beyond the control” of the company.
India’s central bank unveiled steps to encourage banks to lend more to small businesses and home buyers in a bid to spur credit growth in the struggling economy, Bloomberg News reported. Banks will be exempt from setting aside the mandatory cash reserve ratio of 4% of fresh loans for automobiles, residential housing and small businesses until July 31, the Reserve Bank of India said Thursday. It also extended a relaxation of rules on the classification of loans and introduced a 1 trillion rupee ($14 billion) facility for banks to borrow cheaply from the central bank.