A new stable government at the Centre post elections will not result in any renewed surge in overseas debt raising by domestic companies and the deal flows may increase by 10-15 per cent next fiscal.
“I think the surge in equity markets post elections will result in higher interest for IPOs but the overseas bond raising will be about the same size as this year...may be we can have a 10-15 per cent surge,” RBS Managing Director and Head of International Banking for India and Southeast Asia Brijesh Singh told PTI here.
Many analysts are of the view that domestic corporates hitting the overseas debt market will taper off, as interest rate benefits, that is the major consideration for such deals, no longer exist in the overseas markets following the US Fed tapering since November.
In fact, interest rates in the western markets started inching up during mid-May last when the then Fed Chairman Ben Bernanke said he would start reducing its bond buying by $10 billion every month, which finally stated in November.
After this only a handful of companies like ICICI Bank, HDFC Bank, Exim Bank, IRFC, IDBI Bank and Bharti Airtel sold bonds overseas worth $3 billion.
Claiming that RBS tops the list of deal arrangers, he said FY 2013 was a good year where the investment bank helped domestic corporates raise around $15 billion, but said it would have narrowed down to $10-11 billion this fiscal, and may grow only marginally in FY2015.
Most of the money raising will be done by corporates for their refinancing requirements and also by the state-run companies for acquiring assets abroad, he said.