redemptions-will-put-pressure-on-indian-cb-issuers

Redemptions will put pressure on Indian CB issuers

As the first of India's convertible bonds inch towards maturity, some Indian companies may face a bill that they never expected.

By Daniel Inman

September 28, 2008

When convertible bonds landed on Indian shores nearly five years ago, it was a product greeted with much enthusiasm it offered issuers another route to raise the capital that they needed to nourish their rapidly expanding businesses and it provided investors with another way to participate in the exciting Indian growth story. A big attraction for issuers was the cheap credit on offer, which many thought they would never have to pay back since they expected the CBs to convert into equity.

The growth story panned out, but it might have finished a little earlier than most investors thought. The Bombay Sensex index rose in a virtually straight line from about 4,300 points in September...

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