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New Partnership to Expand Indian Fixed Income Reach in International Markets

Partnership is led by latent demand from international investors for Indian credit

Edelweiss Group, India’s leading diversified financial services group, and Sun Global Investments, a leading boutique Investment Manager headquartered in London, have entered into a partnership agreement to offer full service solutions in INR Fixed Income markets - both primary and secondary, as well as USD denominated Indian debt across UK, Europe and Asia.

Sun Global advises Institutional Investors, Family Offices, Corporate and High Net Worth Individuals on a number of investment strategies in the public markets. With an asset base of USD 5 billion, Edelweiss Group offers services across credit, housing Finance, financial markets, wealth and asset management, commodities and life insurance to a substantial and diversified client base.

Speaking on the partnership Mr. Rashesh Shah, Chairman of Edelweiss Group, said: “UK is an emerging global financial hub for rupee bonds and the partnership with Sun Global Investments will enable us to immediately extend our reach as well as relationships across UK, Europe & Asia. Furthermore these bonds help Indian issuers manage currency risk while offering International investors convenient access to Indian debt markets. The partnership is a significant value addition to Edelweiss’ leading Indian debt franchise and will help us offer comprehensive end to end debt solutions to clients.”

Mihir Kapadia, CEO of Sun Global Investments, said: “Sun Global’s partnership with Edelweiss will enable us to leverage our combined Fixed Income capabilities and enable quality Indian issuers access a diverse portfolio and a wide investor base. Indian debt is relatively attractive compared to  other emerging market debt and given India’s strong macroeconomic position – more and more investors are seeking high  quality India investments. High grade credit companies from the public and private sector would be the main issuers of these bonds and the relatively higher yields on offer will result in an excellent portfolio fit for emerging market investors.”

Ravi R. Bubna, Managing Director & CEO, ECL Finance, said: “With the recent changes permitting Indian entities to issue INR denominated Bonds – listed and settled offshore, coupled with the increased appetite for Indian Debt paper from offshore Investors there is a clear need for a coordinated effort. Furthermore this will showcase opportunities in the Indian Debt space to overseas investors.

“The offshore rupee bonds are also referred to as ‘Masala’ bonds and are expected to take-off given the significant underlying appetite for quality Indian credit and local currency exposure among offshore investors,” he added.

This alliance brings together Edelweiss Group’s onshore capabilities which include primary issuances, comprehensive domestic counterparty access for secondary market trading and fixed income/ macroeconomic research with that of Sun Global’s International presence and Investor coverage coupled with a flexible, dynamic Fund construct. The partnership will enable investors access the full range of offerings, originated in India and distributed across international markets. As India Inc. looks at ways to raise money, the ‘Masala’ bonds will open a key diversified investment avenue into the Indian debt market for both investors and issuers.

The fixed income heads of the respective organisations, Ajay Manglunia in Mumbai and Ajay Marwaha in London, will be in charge of the various activities under the partnership.

Edelweiss is a leading player in the domestic debt capital markets with top league table ranking of 56% market share in public debt issues, 15% market share in commercial paper in FY15.  Edelweiss has so far raised over INR 660 billion in FY15 for marquee issuers across the public and private sectors.

Sun Global is an active global debt market participant in primary and secondary segments across UK, Europe & Asia. Since inception in 2008, Sun Global has seen a 22 % annual growth in total assets under advice. Sun Global Investments trades an average of USD 1 billion worth of securities monthly achieving effective financial execution for its clients.