Barclays Pumps $400m Into India in Largest Capital Infusion in Three Decades

Barclays said on Thursday it is pumping more than $400 million into its India arm to tap rising corporate and investment banking activity in the country, which is now recovering from the pandemic.

This is Barclays’ single largest capital infusion in its Indian business in the last three decades. It comes after the British lender pulled out of the retail business in Asia’s third-largest economy in 2011 and exited its equity investment business in 2016.

Barclays said the investment would help grow its corporate and debt investment banking, as well as private clients’ businesses.

Revenue from investment banking in India so far this year was $498 million, versus $339 million in the same period last year and $538 million in 2020, according to Dealogic.

Barclays leads India’s debt capital market by US dollar bond volume, with a year-to-date share of 14%, according to Dealogic. Rivals such as JPMorgan and Standard Chartered have a share of 13% each, while HSBC has 12%.

“As economic activity gathers momentum, there is increased demand for capital from clients,” Jaideep Khanna, Barclays’ country CEO for India, said.

Barclays India mainly lends to corporates with exposures largely to highly rated clients and subsidiaries of multinational companies, according to Fitch unit India Ratings & Research.

“Last year was a very good year for the debt capital market in India, particularly as domestic bank credit didn’t take off much,” said Ananth Narayan, associate professor of finance at SP Jain Institute of Management and Research. ”There was a lot of interest in global credit and the overall market has been robust,”

With the fresh capital infusion, Barclays India’s Tier-1 capital has increased by 55%.

“According to central bank norms, there are limits placed on what a lender can do with respect to their balance sheet, but now that the bank’s overall capital base has expanded, its ability to lend more has increased,” said a person familiar with the matter. The person did not wish to be identified as he was not authorised to speak to the media.

• Reuters and Jim Pollard