Realty debt could be next flash point in India's credit market: ICICI Pru

Indian shadow banks now face rising risks that weaker developers may struggle to repay those borrowings, as housing sales have failed to keep pace with debt expansion

The next flash point in India’s credit markets could be real-estate debt.

That’s the view of ICICI Prudential Life Insurance Co., a major corporate bond buyer and one of India’s top life insurers. The firm avoided investing in debt of stressed companies before credit market strains spread last year.

That crisis was triggered by shock defaults by major infrastructure financier IL&FS Group, and its fallout pushed up financing costs for a range of borrowers including wealthy property tycoons struggling to roll over debt. The country hardly needs more stresses now just as credit markets regain some normalcy after policy makers took steps