Thursday, July 15, 2010
State Bank of India, the nation's largest lender, plans to meet investors in Europe, Asia and the U.S. from July 15 ahead of a potential dollar bond sale, according to a person familiar with the matter. The Mumbai-based bank's London branch hired Bank of America Corp., Citigroup Inc., Deutsche Bank AG, HSBC Holdings Plc, Royal Bank of Scotland Group Plc and UBS AG to arrange the meetings, the person said.
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This appears to be a good investment opportunity for the affluent NRIs. But the catch is how is the Bank going to ensure that the investors are protected against the depreciating dollar on redemption say after 5 or 7 years, rate of interest. In the past, the Bonds paid retail investors a higher return than they would have received from similar financial instruments in their country of residence. In the past, India benefited as the investors did not seek as high a country risk premium as markets would have demanded.
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