First private sector Indian corporate set to issue Masala bonds in London

First private sector Indian corporate set to issue Masala bonds in London

  • HDFC to raise up to USD 750 million to improve housing infrastructure in India
  • Follows world’s first green Masala bond recently listed in London by IFC
  • Reinforces London Stock Exchange’s position as leading Masala bond exchange internationally

India’s largest mortgage finance company, Housing Development Finance Corporation (HDFC), has chosen London Stock Exchange to launch a programme of offshore rupee-denominated bonds, the first by a private sector Indian company. The ‘Masala’ bonds are set to raise up to USD 750 million, with the proceeds being used to improve housing infrastructure in India. Masala bonds will be crucial to the expansion of India’s innovative economy as they allow Indian companies to raise finance to expand and grow without exposing themselves to currency risk.

Coming in the same week as the visit of Indian Prime Minister Narendra Modi, this will help strengthen the increasingly vibrant economic and financial ties between the UK and India.

London Stock Exchange Group has a long history of supporting Indian companies seeking international growth capital. There are currently 55 Indian or India-focused companies quoted on London’s markets in addition to 26 Indian Global Depository Receipts listed on London’s International Order Book. In 2014 the total value of Indian GDR trading on IOB was US$6.23bn. Indian companies have raised equity capital worth $8.1 billion in London. London Stock Exchange has seen 27 INR or Masala bonds listed in total on its markets (12 currently active) that have raised GBP equivalent of £2.85 billion.

Nikhil Rathi, CEO, London Stock Exchange said:

"This milestone issuance, the first of its kind globally, is a significant development for private sector Indian companies looking to access international capital to finance Indian infrastructure projects. London Stock Exchange is the leading international exchange for offshore rupee-denominated Masala bonds and we look forward to working with other companies to launch similar programmes to the one announced today. London Stock Exchange has more Indian companies listed on our equity and debt markets than any other international market and through MillenniumIT, LSEG also provides cutting edge technology to some of India’s leading exchanges."

Mr. Deepak S Parekh, Chairman, HDFC said:

"There is renewed vigour in the India-UK relationship and HDFC is delighted to announce its intention to list its bonds on London Stock Exchange. UK is the global hub for financial services and the Reserve Bank of India's guidelines permitting overseas Rupee denominated bond, will open up a new source of funding for us."

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