Published: March 22, 2015
Indian corporates tap GCC banks; bumper year predicted for sukuk.
Banks in Dubai, borrowers in Delhi
The managing director of the UAE’s Alpen Capital expects a rise in Indian companies tapping GCC financiers.
It may be unfair to compare an individual nation state with a group of countries but it is striking that the Gulf Cooperation Council (GCC), not China or the US, is India’s largest trading partner. While the Gulf provides around half of India’s oil, in the 2012-13 financial year India exported US$51bn worth of goods to Gulf, more than it sent to the European Union.
Another form of cooperation is now starting to emerge – Indian companies borrowing from Gulf-based banks. In December Jet Airways, India’s second-largest carrier, raised a US$150mn syndicated loan from GCC banks led by Mashreq. Jindal SAW, an Indian manufacturer, recently raised US$127mn from GCC lenders.
“The local authorities are encouraging Indian companies to diversify their funding base,” Mashreq’s director of corporate finance, Walid Amri, told EMEA Finance at the time. “As the Middle East market becomes more competitive and local borrowers are aggressively negotiating terms and prices, Middle East banks have decided it’s