India

Investors in Indian equity funds held tight and even bought more last month, seemingly unfazed by the selloff triggered by a tumbling currency and a crisis at a troubled lender, Bloomberg News reported. Stock funds took in 111 billion rupees ($1.5 billion) in September, the most since May, up from 83 billion rupees in August, data from the Association of Mutual Funds in India show.

Infrastructure Leasing & Financial Services Ltd. is missing more debt obligations, even as the Indian government pledged to prevent further defaults, underscoring the challenges its new board faces in fixing the firm’s mounting debt problems, Bloomberg News reported. IL&FS failed to service principal and interest on loans from banks, inter-corporate deposit and commercial papers totaling 339 million rupees ($4.6 million) due for the period from Sept. 30 to Oct. 4, it said in an exchange filing.

India’s top court has set new norms for the country’s bankruptcy law in an attempt to speed up the resolution of billions of dollars worth of soured loans weighing down banks, Bloomberg News reported. The Supreme Court on Thursday set mandatory timelines for the various stages of the insolvency resolution process, which the law says must be concluded in 270 days, and imposed restrictions on when and why the process can be appealed or stalled.

The jewel gathering dust in India’s bankruptcy court can have a suitor after all. The two top bidders may stay in the race for Essar Steel India Ltd.’s 10 million-tons-a-year plant, the country’s top court ruled on Thursday, provided they first make banks whole, a Bloomberg View reported. There’s the catch. For ArcelorMittal, the payment required is for two unconnected defaults. The world’s biggest steel producer and Lakshmi Mittal, its billionaire controlling shareholder, sold their interest in Uttam Galva Steels Ltd. and KSS Petron Pvt. to become eligible to acquire Essar.

India’s benchmark equity index fell the most in eight months as surging oil prices added to the rupee’s weakness, prompting foreign investors to sell a day ahead of an expected increase in interest rates by the central bank, Bloomberg News reported. The S&P BSE Sensex declined 2.2 percent to 35,169.16 in Mumbai, with Reliance Industries Ltd. and HDFC Bank Ltd. the biggest drags. All 19 sector sub-indexes compiled by BSE Ltd. retreated, with a measure of energy companies dropping the most. The benchmark gauge earlier fell as much as 2.7 percent. ICICI Bank Ltd.

A crisis at one of India’s biggest infrastructure financiers is the latest example of how the end of an easy money era is causing strain in the world’s fastest-growing economy, Bloomberg News reported. Rising borrowing costs are putting pressure on lenders like Infrastructure Leasing & Financial Services Ltd. -- whose recent debt defaults rocked financial markets in India and sparked fears of a contagion -- as well as on debt-focused mutual funds that are liquidating holdings.

India’s shock seizure of a troubled shadow bank on Monday means contagion’s off the table. It doesn’t mean the saga’s over, Bloomberg News reported. That’s the verdict of strategists and investors after Prime Minister Narendra Modi’s government took control of Infrastructure Leasing & Financial Services Ltd., promising to end the group’s string of defaults. But the giant IL&FS group still owns long-term infrastructure financed with short-term funding, and its new board will need to make progress selling assets to pare $12.6 billion of debt.

The Indian government, which seized control of debt-laden financier Infrastructure Leasing & Financial Services Ltd., has pledged to ensure the beleaguered lender has the money to prevent further defaults, Bloomberg News reported. Superseding the board of IL&FS, which has defaulted on more than five of its obligations, was essential to restore the confidence of the financial markets, according to a statement by the finance ministry on Monday.

Troubled Indian shadow bank Infrastructure Leasing & Financial Services Ltd., whose recent debt defaults sparked concern about contagion in the nation’s financial markets, secured a lifeline after shareholders approved its plans to raise money through debt and equity, Bloomberg News reported. Stockholders green-lit IL&FS’s plans to raise as much as 150 billion rupees ($2.1 billion) through a non-convertible debt issue, hike the firm’s borrowing limit by 40 percent to 350 billion rupees and increase its share capital to enable a rights offering, the company said in a filing.

In July, Suyash Choudhary warned a liquidity crisis is looming in India and funding costs for companies were set to soar. Now, as investors get to grips with a cash crunch made worse by the debt crisis at a lender, Choudhary, the head of fixed-income funds at IDFC Asset Management Co., says the Reserve Bank of India may go slow in adding to the two rate increases since June, Bloomberg News reported. “Financial conditions have turned tight, and I think the RBI will have to pace incremental tightening at this juncture,” he said in an interview.