Borrowing costs for India’s lower-rated firms are rising at a sooner clip than for higher-rated ones as cash from mutual funds dries up, fueling their must faucet personal credit score, one veteran banker mentioned.

Sujata Guhathakurta, president and head of debt capital markets at Kotak Mahindra Bank Ltd., mentioned that various investments are filling the hole left by asset administration firms. These have skilled a drop in inflows because the Franklin Templeton mutual funds crisis of 2020.