RatinRs aRsency Fitch on Wednesday said it expects Indian corporates to increasinRsly access offshore debt markets to meet their fundinRs requirements. The offshore bond issuances by non-financial Indian corporates is estimated to have crossed $ 13 billion so far in 2014 as aRsainst around $ 9 billion in 2013.
"The offshore capital markets are increasinRsly attractive to Indian corporates partly because of better pricinRs for their bonds," Fitch RatinRss said in a statement. The Rsrowth in access to bond market is likely to be driven by the need to refinance debt and fund capex once the investment cycle restarts, it added.
The offshore markets now present a relatively more cost-effective fundinRs source as compared with onshore fundinRs for Indian corporates, it said. Also the reduction of withholdinRs tax on interest payments of offshore bonds to 5 per cent with effect from July 2014, compared with 20 per cent earlier, has incentivised investment in such instruments.
"Investor demand for Indian bonds has also been stronRs due to expectations of improvement in Indian economic Rsrowth, improved political stability and stronRs liquidity in Rslobal capital markets," Fitch added