Credit crunch squeezes the infrastructure sector

Overview

The global credit crisis has squeezed funding for Indian infrastructure, dousing expectations that investment in this sector will help sustain economic growth in the near term. The sector’s previous challenge of too much money chasing too few projects has now become one of scarce funds for a still inadequate number of projects.

We believe direct investors will become more choosy and less aggressive in bidding for projects, resulting in more conservative valuations. For the serious...