A Crucial Source of Funding for Indian Founders Is Drying Up
- Major shadow lenders are said to curtail share-pledged loans
- Comes after incidents with Anil Ambani companies, Essel Group
A Reliance Industries Ltd. construction site stands at the Bandra Kurla Complex in Mumbai, India, on Sunday, Jan. 28, 2018.
Photographer: Dhiraj Singh/BloombergThis article is for subscribers only.
India’s business titans are facing a worrying new development: in recent weeks, shadow lenders have been cutting them off from a key financing channel.
Company founders have long fueled dreams to expand their business empires with loans they get by pledging stakes in their firms. But recent scares have prompted at least two major shadow banks to turn off the faucet in the past month, the longest dry spell in six years, people familiar with the matter say.