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India’s primary dollar corporate bond market is in the throes of its longest dry spell in 13 years, as a historically weak rupee makes servicing offshore debt unattractive. 

Just $6.83 billion have been raised this year and there hasn’t been a US-currency note sold by an Indian company since April, according to Bloomberg-compiled data. That’s the longest period without a deal since 2009 and the lowest issuance tally since 2018. 

India faces the additional challenge of record government issuance competing for investors’ funds, and the currency plummeted to a record low against the dollar. 

“The fall in dollar issuances this year could be due to a sharp rise in dollar interest rates thus reducing the arbitrage with borrowing in India," said Arvind Chari, the chief investment officer at Quantum Advisors Pvt.. “The sharp depreciation in the rupee may also have postponed some fund raising plans."

Several companies have pulled deals this year. JSW Steel Ltd., India’s most valuable steel mill, said last month it intends to focus on the domestic market for funds this year as the cost of capital is lower. 

The trend away from dollar debt in India is in line with developments seen elsewhere in Asia. The currencies of Thailand, Indonesia and the Philippines have also depreciated, leading to a decline in foreign-currency issuance. 

 

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