India’s `Dirty Dozen’ Debtors Lure Big Funds to Bad Loans

India’s highest-profile default this year and the government’s plan to inject capital into state-controlled lenders have thrust the nation’s bad debt into the spotlight. Some global debt funds increasingly like what they see.

The nation’s so-called dirty dozen -- 12 large debtors that have been ordered to go through the bankruptcy courts -- are one focus for funds including Bain Capital Credit and alternative investment firm Varde Partners. The government’s decision last month to inject 2.11 trillion rupees ($32.6 billion) of capital into state-controlled lenders over two years, as well as the country’s new insolvency code that took effect in ...