Investors are piling into India’s so-called shadow banking sector, which has been buoyed by consumer demand for credit in one of the world’s fastest-growing economies even as concerns remain about risky loans.
US investor Bain Capital in July bought a majority stake in tycoon Gautam Adani’s shadow banking business comprising Adani Capital and Adani Housing Finance, pledging $170mn in debt and equity to expand the enterprise.
Reliance Industries, India’s biggest company by market value, plans to soon list its own shadow bank, Jio Financial Services. The company has signalled its ambitions beyond lending, announcing a deal with BlackRock, the world’s largest money manager, to each invest $150mn in an asset management venture. Small business lender SBFC is also seeking to raise about $200mn in an initial public offering, according to bankers.