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HDFC masala bond on London Stock Exchange oversubscribed 4.3 times

15 July, 2016

Housing Development Finance Corp (HDFC)’s $450 million (Rs 3,000 crore) masala bond offering at the London Stock Exchange (LSE) was oversubscribed 4.3 times, according to a statement by the exchange.

The 37-month dated rupee denominated bond, labelled colloquially as masala bond, raised around Rs 3,000 crore with an annual yield of 8.33%.  

“Indian companies can now access international rupee-based financing without having to be concerned about foreign-exchange risks,” said Nikhil Rathi, CEO, London Stock Exchange and director – international development, London Stock Exchange Group.

“This is a milestone transaction for HDFC. We have achieved our objective of attracting a global pool of capital to diversify our borrowing profile,” said HDFC chairman Deepak Parekh.

Axis Bank, Credit Suisse and Nomura managed the issue.

Previously, 30 offshore Indian rupee bonds have been listed in total on LSE, raising $3.5 billion, the exchange said.

In June, Axis Bank raised $500 million on LSE after it launched an internationally-listed certified green bond to finance climate change solutions around the world.

In April, in an attempt to raise resources for India’s green energy programme, state-run firms such as NTPC, Neyveli Lignite Corp,  Power Finance Corp, Rural Electrification Corp and PTC India, said they plan to issue masala bonds to raise $1 billion.

In August 2015, the International Finance Corporation (IFC), the private sector investment arm of the World Bank, issued an offshore green masala bond, raising £31 million.

In November 2014, IFC issued a 10-year, $163 million Indian rupee bond to increase foreign investment in India, mobilising international capital markets to support infrastructure development in the country.

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HDFC masala bond on London Stock Exchange oversubscribed 4.3 times

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