Kotak Launches New Indian Corporate Debt Fund
Kotak Mahindra (UK) Ltd., (a wholly owned subsidiary of India's Kotak Mahindra Bank Ltd.) announced today that it is launching a new Fixed Maturity Plan (FMP) to help foreign investors access the India corporate debt market. This follows the closure in early July of Kotak Fixed Maturity Plan-I, which raised about $140 million from investors worldwide.
- (1888PressRelease) July 28, 2010 - Sharp increase in investment flows from international investors seeking to access India's corporate debt market
International investors are increasingly looking for ways to invest in Indian corporate debt. They are attracted by the combination of safety of capital coupled with higher returns than are available from companies in western markets. Data released by the Securities and Exchange board of India (SEBI), shows that Foreign Institutional Investors (FIIs) invested US$ 6.88 billion in debt in India compared to US$ 6.08 billion in equity from January to June 2010.
The Kotak Fixed Maturity Plan-I is a close ended debt fund which aims to generate returns through investments in debt and money market instruments such as domestic bonds of Indian corporates with a tenure of about 12 months. The fund is denominated in US dollars. Kotak's next FMP will look to raise a maximum of US$250 million from investors across the globe.
Paul Parambi, Head of the International Business Kotak Mahindra Bank Limited commented, "From 1992-2009, cumulative investment by FIIs into Indian debt totalled US$ 7.46 billion, whereas, within just the first six months of 2010, net FII inflows in Indian debt touched US$6.88 billion. These strong inflows have been driven by the significant difference in the prevailing yields in the Indian markets compared to the western world. The opportunity window for investment in Indian debt is limited as there are caps on the total amount of foreign money that can be invested in the Indian debt market.
As an Indian investment specialist, Kotak's aim is to provide investors with a full-range of funds allowing them to access market growth in India. Investors in UK, Europe, Middle East and Far East have been particularly keen and we think they will have a particular interest in our new debt funds."
Important Notice:
The views mentioned above are that of the fund management team at Kotak group and are not intended as a recommendation or for the purpose of soliciting any action in relation to any investments, or to be otherwise relied upon for any purpose.
In the preparation of the material contained in this document we have used information that is publicly available, including information developed in-house. Information gathered & material used in this document is believed to be from reliable sources. We do not warrant the accuracy, reasonableness and/or completeness of any information
Investments in India are subject to the normal risks associated with emerging markets, including but not limited to risk of losing some or all of the capital invested, high volatility, variable liquidity, geopolitical risks (including political instability), exchange rate fluctuations and restrictions on foreign investors. Investments in India should, therefore, be considered only as part of a well diversified portfolio.
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