Yatin Shah sees opportunity in corporate bonds after IL&FS crisis

Yatin Shah, co-founder and executive director of IIFL Wealth Management Ltd., expects the spreads to correct within 4-6 months as the "bit of panic" settles down, he said in an interview.

India’s highly rated corporate bonds present a good buying opportunity as authorities looking to move past fallout from a landmark default could take further supportive steps in coming months, according to the nation’s second-biggest wealth manager.

Spreads on highly rated corporate bonds over government bonds are at their highest in nearly five years, amid lingering fallout from defaults by major infrastructure-lender IL&FS group.

Yatin Shah expects the spreads to correct within 4-6 months as the "bit of panic" settles down, he said in an interview.

That will happen as the regulator takes measures that could include additional liquidity or some relaxation of the refinancing window for non-bank lenders, according to Shah.

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Business Standard