The levies may further dent prospects for Indian firms after they reported weaker earnings growth in the latest quarter. Despite the Reserve Bank of India cutting rates by 100 basis points between February and June to spur economic activity, credit growth remains muted.
Loans to indusattempt grew 5.5% year-on-year in June after increasing by 8.1% in the same month last year, according to data by the central bank. Capital raising via local currency corporate bonds surged 16% during April to June year-on-year, with total financing estimated at nearly 3.4 trillion rupees ($38.8 billion), according to Prime Database.
“Currently companies are preferring the rupee bond market for fundraising due to its lower costs,” stated Subramaniam, who has worked at the US bank for about 15 years.
Mergers and acquisitions activity is picking up, with companies exploring domestic and overseas opportunities, stated Subramaniam. If more deals are closed, the credit cycle will automatically pick up, he stated.
BofA has been expanding its corporate banking footprint in India, including its offerings in global payments and transaction services. However, its investment banking franchise, which is undergoing a rebuild, has lagged in league tables in India.
The bank ranked seventh in equity capital market advisory in 2024 and hasn’t broken into the top 10 so far this year, according to data compiled by Bloomberg. The firm is also far behind rivals in M&A rankings for India-related transactions.
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