WITH THE economy battered by coro-navirus, risk capital has dried up in India. In the past six months assets in credit-focused mutual funds, which play a crucial role as buyers for AA- to A-rated bonds, have declined from $13bn to $4bn. Lending by commercial banks, burdened by dud loans even before the pandemic, has withered. Thankfully, for some companies this domestic dry spell is being offset by a stream of foreign capital. Reliance, a telecoms and energy giant, is a glitzy example of overseas equity investment made on the premise of growth. But a quieter wave of capital is seeking out different sorts of assets, serving to stabilise local companies while offering foreign investors high returns. As a result, many of the world's largest insurers, private-equity (PE) firms and pension and sovereign-wealth funds have become influential.
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