Saudi Arabia’s biggest companies are looking abroad for cash, and that could spell new opportunities and fresh risks for foreign investors, including Indian ones. A recent report from S&P Global Ratings noted the marked shift in how Saudi corporates and banks plan to finance their mega-projects.
With the Kingdom’s “Vision 2030” ambitions requiring vast sums for futuristic cities, infrastructure, and diversification, local banks are running close to their lending limits.
Instead of relying just on homegrown savings, Saudi corporates might sell bonds and raise money from international investors, making the Gulf more plugged into global financial markets than ever before. This is what the ratings agency noted.
But this also comes with a catch. When companies and banks borrow from global markets, they often do so in dollars or euros—Western-friendly currencies whose value has swung on trade tantrums and geopolitical decisions, if we take the past three years alone.
This exposure to foreign currency could bring with it new risk: if oil prices dip, or the value of the dollar surges, paying back those loans can become much costlier.
Rising US interest rates or sudden shifts in global risk appetite could also make borrowing more expensive overnight. For Saudi entities, this means they’ll not only need to manage their projects, but also become experts at handling foreign exchange volatility and complex global financial conditions. Till now, they have been insulated from this.
For India, there’s a possibility for an upside. As Saudi Arabia broadens its funding sources, Indian banks, mutual funds, and institutional investors might get greater access to Saudi bonds and syndicated loans. Moreover, this could diversify Indian portfolios.
S&P Credit Ratings already sees Saudi-listed firms needing annual capex of about $85 billion-$95 billion over the 2025-2027 window. “We forecast that non-oil corporates’ capex will remain elevated, in line with Vision 2030 ambitions. Concretely, we expect publicly listed Saudi corporates’ aggregate capex will remain high due to investments within the materials, telecommunications, and utilities sectors,” noted the ratings firm.
India opportunity
As India deepens trade and energy ties with the Gulf nations, better-capitalised Saudi partners could mean more robust infrastructure investment, more reliable payments for Indian suppliers, and more opportunities for collaboration across banking, energy, and technology.
Indian companies with expertise in project management, engineering, or digital services might find new Gulf contracts more lucrative and better funded, reducing business risk in the region.
Indian investors and policymakers should also keep an eye on their own exposures. With Saudi projects increasingly mixing with global capital markets, any shocks in Riyadh could ripple out to India, especially for anyone holding these potential international bonds.
However, for investors, there is also another giant to consider, the PIF.
The region’s public issuance fund, or PIF, is the key driver of Saudi Arabia’s capital markets. In fact, at 2024-end, its total asset base was $1.15 trillion. The PIF also has stakes in some of Saudi Arabia’s biggest companies, such as Aramco, Saudi National Bank, Saudi Telecom Company, Saudi Arabian Mining Company (Ma'aden), Tadawul, and Riyad Bank. Moreover, the fund is also the key sponsor to some of the Vision 2030 giga-projects like NEOM, Diriyah, and Qiddiya.
