Bonds draw Japanese banks

The Japanese are not only active in the Indian equity markets but also have shown keen interest in increasing exposure to fixed income instruments such as bonds and loans.

According to entities active in overseas bond syndication, Japanese banks have been aggressive in participating in the syndication of loans for Indian corporates abroad.

This not only includes loans for top rated firms but also for mid-sized ones.

"Mizuho and Sumitomo have been active participants in syndications for mid-sized corporate such as Amtek Auto, Jindal Power and Jindal SAW," said a banker.

The response to the Jindal SAW debt issue was so overwhelming that the company raised its borrowings from $30 million to $40 million, said the banker.

Besides the Japanese, Malaysian banks, too, are interested in Indian papers. "They are not leaving any opportunity to invest in Indian financial instruments," said a banker.

A senior banker said this is for the first time that he's seeing Japanese banks visiting their Indian counterparts to know about good opportunities. "They want to increase exposure to Indian assets," he said.

Japanese banks have invested in India-dedicated equity funds.

The trend of banks from newer countries picking up Indian paper began last year when Taiwanese and Chinese banks lapped up bonds and loans issued by local firms.

Till then, what you normally saw was the usual cluster of Singapore and Hong Kong-based buying Indian issues.

These include the China Commercial Trust, the Land Bank and the , Chiang Tung Bank of Taiwan among others.

According to local bankers, the Taiwanese and Chinese entities wanted to increase their exposure to quality Indian corporates because they were fighting to reduce non-performing assets (NPAs).

"In Asia, the outlook on Indian paper is bullish. They are also perceived as being credit-worthy and better rated in terms of corporate governance and economic and financial fundamentals," said a dealer.