Issuers rule in Indian CB market

Banks main losers, but investors show signs of becoming more cautious.
March 30, 2006
Deal of the month it wonÆt be, but the $500 million convertible bond sold by Reliance Communications Ventures last week has attracted a lot of attention in the market. Short-term reactions aside, the issue highlights one of the key problems of the Indian CB market û deal are often far too aggressively priced.

The bookrunner of the Reliance deal - Deutsche Bank - has refuted claims that it was mispriced and it is still sitting on a large chunk of paper.

Such a scenario is not uncommon in cases where several banks compete for the underwriting mandate. Of all Asian markets, India is the one where issuers appear to rule and banks commonly sacrifice their...
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