Four Indian Banks, including State Bank of India and IDBI Bank, figure amongst the top five banks in the Asia-Pacific region for arranging syndicated loans in 2010.
“Amongst Asia-Pacific countries, Indian entities have been most active in raising funds mostly from infrastructure projects in the power and airports segments. Small amounts were raised for creating industrial capacities by corporates,” said a senior executive of a large public sector bank.
The total value of loans syndicated by four banks was about $ 4.66 billion. There is a wide gap between loan amount syndicated by Indian banks and that by the number one player (Bank of Taiwan) at $ 12.78 billion since January, according to Thomson Reuters data.
SBI, the country’s largest lender, with a mandate for five deals raised $ 1.58 billion followed by IDBI Bank ($ 1.41 billion in three deals), Axis bank ($ 980 million) and ICICI Bank ($ 686 million).
| SYNDICATED LOANS: A FACT-SHEET | |||
| Bookrunner |
Year-to-Date | ||
| Proceeds ($ million) | Market Share (%) | Number of Deals | |
| Bank of Taiwan | 12785.6 | 40.9 | 9.0 |
| State Bank of India | 1588.0 | 5.1 | 5.0 |
| IDBI Bank | 1410.2 | 4.5 | 3.0 |
| Axis Bank | 980.8 | 3.1 | 4.0 |
| ICICI Bank | 686.5 | 2.2 | 2.0 |
| Standard Chartered PLC | 633.0 | 2.0 | 7.0 |
| Taiwan Co-op Bank | 475.7 | 1.5 | 8.0 |
| DBS Group Holdings | 362.0 | 1.2 | 6.0 |
| Fubon Financial Holding Co | 345.0 | 1.1 | 9.0 |
| Land Bank of Taiwan | 275.9 | 0.9 | 7.0 |
| Top ten total | 19542.7 | 62.5 | 60.0 |
| Source: Thomson Reuters | |||
Fears about default in bond payments by Greece, had pushed the cost of borrowing in the global market. The money is available but the credit spreads were above the benchmark, like in London Inter Bank - Offered rate (LIBOR). They have moved up 35-70 basis points post the crisis in Greece.
Even after factoring in premium of foreign exchange risks, it is cheaper for Indian companies to raise funds from international market compared to domestic market.
Referring to what Indian companies think about raising funds, a senior official with Bank of Baroda’s London operations said the tempo built in this quarter (January-march 2010) is expected to gather momentum. The economy is expected to grow by 8.5 per cent in the financial year 2010-11. The foreign investment flows in 2009-10 (April 2009-Janaury 2010) stood at $ 55.38 billion. According to Reserve Bank of India data, foreign direct investment rose to $ 28.54 billion and portfolio flows were about $ 26.83 billion.
