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This US Investment Giant Thinks It’s The Perfect Time To Enter India’s Credit Market.

Despite holding a tiny piece of the global $1.5 trillion, India has seen the most considerable investment volume in Asia.

Franklin Templeton’s India branch is reportedly gearing up to launch a private credit fund, enabling it to offer loans to companies in a market where both banks and non-banking financial companies (NBFCs), are largely hesitant to cater to anyone other than top-rated businesses.

According to Bloomberg, Santosh Kamath, the former Chief Investment Officer at Franklin Templeton Asset Management India, will likely manage this new venture.

Kamath, known for his fascination with high-yield Indian debt, actively contributed to the construction of India’s market for lower-rated corporate bonds. However, the 2020 coronavirus lock-downs led to the freezing of six funds under his control.

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Flags of India and US adorn the Eisenhower Executive Office Building of the White House in Washington, DC. India has seen the most considerable investment volume in Asia. DANIEL SLIM/AFP VIA GETTY IMAGES.

This move also aligns Templeton with global firms like Apollo Global Management, Cerberus Capital Management LP, Varde Partners and The Carlyle Group, which are expanding their operations in one of the world’s fastest-growing economies.

Despite holding a tiny piece of the global $1.5 trillion (₹123.41 lakh crore) private credit assets under management pie, India has seen the most considerable investment volume in Asia in the past five years. The country’s private debt-focused assets under management nearly doubled to $15.5 billion (₹1.27 lakh crore) as of December 2022 from the previous year.

Templeton is reportedly preparing to apply for a Category II Alternative Investment Fund license from the Securities and Exchange Board of India, which will pave the way for the launch of the private credit fund. The target size for the fund will be determined once they secure the license.

“In June, India’s inflation rate was 4.81%, which remains within the Reserve Bank of India’s tolerance band of 2% to 6%. The central bank has left interest rates unchanged at 6.5% since April,” said CNBC news.

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Flags of India and US adorn the Eisenhower Executive Office Building of the White House in Washington, DC. India has seen the most considerable investment volume in Asia. DANIEL SLIM/AFP VIA GETTY IMAGES.

“All the macro variables are stacking, and we are in the growth cycle … There is a paradigm shift and flight of capital from Indian households savings to equity to contribute to the India growth story,” said Azeez on CNBC’s “Squawk Box Asia last week.

The International Monetary Fund recently raised its 2023 growth forecast for India, citing stronger growth in the fourth-quarter last year, powered by domestic investment.

Both the Sensex and Nifty hit all-time highs in July and analysts are confident the indexes will bring positive returns for years to come.

“Many people have said in the past that India is the place to invest in, but they have been disappointed because [the momentum] will start, and it’ll suddenly die out,” said Soumya Rajan, CEO and founder of Mumbai-based Waterfield Advisors.

Produced in association with Benzinga

Edited by Eunice Anyango Oyule and Judy J. Rotich

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