Goldman Expands Credit Business in India, Targets Diaspora Investors

Goldman Expands Credit Business in India :

Goldman Sachs Group Inc. is strategically expanding its credit business in India, eyeing the burgeoning opportunities presented by the country’s accelerating economic growth and targeting the affluent diaspora investors. With a significant shift in global investment focus from China to India, the renowned investment bank is set to broaden its loan offerings and enhance its engagement with high-net-worth individuals both within India and abroad.

Led by Sonjoy Chatterjee, Chairman, and CEO of Goldman Sachs in India, the investment bank aims to diversify its loan portfolio via its shadow banking unit. The plan involves acquiring a license to escalate currency trading capabilities, facilitating interactions with diverse entities such as financial investors, equity customers, and corporate clients.

India’s projected growth of 7% by the end of the fiscal year ending March has attracted significant attention from Wall Street lenders and private equity giants. Goldman, which already boasts the largest overseas office in India housing a diverse workforce, leads the charts for this year’s Indian deals, according to data compiled by Bloomberg.

“While acknowledging the enduring significance of the Chinese market, Indian markets have witnessed increased emerging market equity flows, presenting a favorable investment landscape,” commented Chatterjee.

Goldman’s credit expansion strategy involves leveraging its non-banking financial company in addition to a private credit fund previously managed on its balance sheet within India. The plan is to originate and syndicate loans, keeping only a residual portion, aligning with the unique dynamics of India’s shadow banking sector.

The Reserve Bank of India’s decision last year to authorize standalone primary dealers to offer foreign exchange products has prompted Goldman Sachs to pursue scaling up its currency trading operations. This regulatory move aimed to strengthen these dealers as market makers, parallel to primary dealer banks.

Chatterjee emphasized the opportunity within wealth management, noting the increased prominence of Indian entrepreneurs relocating abroad amidst the pandemic. This shift has opened doors for Goldman to serve such clients from global offices in Singapore, London, and Dubai.

Further emphasizing the robust interest in Indian investment, Chatterjee highlighted the appetite of private equity firms, particularly in deploying substantial capital from Asia-focused funds into India. The surge in capital inflow is anticipated to fuel future deal-making activities within the country.

Goldman Sachs’ strategic maneuvers underscore its commitment to harnessing the potential of India’s thriving economy and tapping into the growing opportunities offered by the Indian diaspora, reflecting a dynamic shift in global investment priorities.

This approach aligns with Goldman’s vision of strengthening its foothold in India’s financial landscape while catering to the evolving needs of investors and businesses in the country and abroad.

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