Kotak Mahindra UK has announced the launch of a new investment plan that would open up access into India's corporate debt market.

The new Fixed Maturity Plan is the firm's answer to the growing demand for opportunities in India's corporate debt sector, most of which come from Western markets. Data released by the Securities and Exchange Board of India shows that foreign institutional investors had invested $6.88 billion in debt in India, compared to $6.08 billion in equity between January and June 2010.

The launch shortly follows the early July 2010 closure of the Kotak Fixed Maturity Plan-I, which raised around $140 million. The next FMP is looking to raise approximately $250 million from investors worldwide.

"These strong inflows have been driven by the significant difference in the prevailing yields in the Indian markets compared to the Western world. The opportunity window for investment in Indian debt is limited as there are caps on the total amount of foreign money that can be invested in the Indian debt market," said Paul Parambi, the head of international business at Kotak Mahindra Bank.

Kotak Mahindra UK, a subsidiary of India's Kotak Mahindra Bank, has over $10 billion in assets under management and advisory as of March 2010.