Goldman Sachs ramps up credit business in India, targets rich diaspora

By Preeti Singh and Baiju Kalesh

Goldman Sachs Group Inc. plans to ramp up its credit business in India and sees an increasing opportunity to target the nation’s wealthy diaspora as global investors shift their focus from China to what is now the world’s fastest-growing major economy.
 

The investment bank wants to broaden the range of loans it offers through its shadow banking unit, according to Sonjoy Chatterjee, chairman and chief executive officer for Goldman in India. The firm also plans to get a license to scale up in currency trading, which would allow Goldman to deal with any counterparty such as financial investors, equity customers or a corporate customer, he said in an interview.

Goldman joins Wall Street lenders and private equity giants chasing opportunities in an economy that is forecast to grow 7% in the year ending March. India is already home to the New York-based firm’s biggest overseas office, which houses thousands of workers from quants to software engineers. Goldman tops the league table for India deals this year, according to data compiled by Bloomberg.

“Indian markets have benefited from the emerging market equity flows that have shifted from China, though obviously the China story is not going to go away,” Chatterjee said. 

Credit Push
 

The credit expansion through the firm’s non-banking financial company comes on top of a private credit fund that Goldman already runs on its own balance sheet in the South Asian country, he said. Most NBFCs, often referred to as shadow banks in India, can make loans but not accept deposits.

“This will be more of what we might want to originate and syndicate, keeping only a residual portion,” he said. 

In wealth management, many Indian entrepreneurs have moved abroad during the pandemic, which has created a “more prominent” opportunity to serve such clients from offices in Singapore, London and Dubai, he said. 

Private Equity
 

Chatterjee, who joined Goldman Sachs as a partner in 2010 after spending 16 years at India’s ICICI Bank, said private equity firms are looking to deploy a substantial proportion of the capital they’ve raised for Asia funds in India. That in turn is likely to fuel dealmaking in the country in future.

“Private capital continues to remain very hungry to invest,” he said. “When you have a large Asia fund of $8-10 billion, India is the most obvious destination.”