For Indian junk bonds, it's love in the time of China's Evergrande crisis

For investors wary of China, looking at India makes sense but the extra dollars arrive with a cost.

There are no takers in India for corporate notes with even a whiff of credit risk. But such is the fear among global investors around China’s overleveraged property developers that money can’t stop pouring into Indian high-yield dollar bonds.

Domestic debt issuances by all except the top-rated borrowers have shrunk since the collapse of the IL&FS Group, a major infrastructure financier, in September 2018. Firms rated below AA have managed to garner just 382 billion rupees ($5.2 billion) this year, a far cry from their 2017 haul of 2.1 trillion rupees.

The situation in the international market is the exact