Dubai-based Abraaj Group is the latest in a line of institutional investors making a move on India’s debt markets.
The $10 billion money manager has traditionally focused on private equity and real estate investing, but is reportedly considering structured credit deals, like corporate loans and bonds.
Among several structured credit deals Abraaj is evaluating is one in a Pune-based LED products maker.
Other large foreign private equity firms like Blackstone Group, Apollo Global Management and Lone Star Funds have entered India’s structured credit market.
“Many [private equity] funds are realizing that investment opportunities in late-stage, high-growth companies in India are limited; as such, many of them are turning to structured credit deals for better risk-adjusted returns,” Nachiket Naik of Mumbai-based IREP Credit Capital, told LiveMint.
The shift is significant given the notorious complexity of India’s debt markets for foreign investors. Often foreign investors have to structure debt deals in India with some form of equity conversion component.
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Photo credit: Reuters