HDFC lists world's first Masala bond by an Indian corporate on London Stock Exchange

HDFC lists world's first Masala bond by an Indian corporate on London Stock Exchange

  • HDFC is first ever Indian corporate to list Masala bond, chooses London Stock Exchange for landmark issuance
  • Rupee denominated bond raises INR 30 billion (USD 450 million equivalent), with 8.33% annual yield, attracting global investor support
  • Listing first announced during Prime Minister Narendra Modi’s visit to London in 2015
  • Confirms London Stock Exchange’s position as leading international listing venue for Indian finance

London Stock Exchange today welcomes the world’s first Masala bond issued by an Indian corporate. The landmark bond issuance from Housing Development Finance Corp (HDFC), one of India’s leading banking and financial services companies was 4.3 times oversubscribed and paves the way for the opening of the Masala bond market globally to support Indian company and infrastructure financing. 

The 37 month dated Rupee denominated bond, commonly known as a Masala bond, raised INR 30 billion, equivalent to USD 450 million, with an annual yield of 8.33% and secured global investor support. The bond will help HDFC to diversify its borrowing profile and access global investors. The listing follows Prime Minister Narendra Modi’s announcement of USD 1 billion equivalent of Masala bond issuance in the UK, made during his visit to London in 2015.

London Stock Exchange has a strong track record of supporting Masala bond issuance by supranational institutions on its markets. 30 offshore Indian Rupee bonds have listed in total on London Stock Exchange, raising equivalent to approximately USD 3.5 billion. London Stock Exchange last year saw the listing of the world’s first ever green Masala bond on its markets and there have been two further listings in 2016, raising a total of INR 7 billion, reinforcing London Stock Exchange’s position as the leading global listing venue for Rupee denominated bonds.

Nikhil Rathi, CEO, London Stock Exchange plc & Director of International Development, London Stock Exchange Group:
“Today's Masala bond issuance by HDFC is a world first and London Stock Exchange is proud to be the partner of choice for this landmark event for Indian finance. Thanks to HDFC, in particular Chairman, Mr Deepak Parekh, a vital new international channel of finance has opened up for Indian corporates and infrastructure.

“The success of this issuance shows the support of the global markets for high quality Indian companies.  Taking advantage of the efficient listing process and tapping the global markets in London, home to the deepest international investor base, Indian companies can now access international Rupee-based financing without having to be concerned about foreign exchange risks. We look forward to building this market with Indian partners and authorities over the long-term, a major success for the India-UK Financial Partnership."

Deepak Parekh, Chairman, HDFC:
“This is a milestone transaction for HDFC. We have successfully achieved our objective  of attracting a global pool of capital to further diversify our borrowing profile. The positive investor response towards this issuance reinforces the blue-chip positioning of HDFC, and establishes a significant benchmark for Indian companies.”

Shikha Sharma, Managing Director & CEO of Axis Bank:
"I congratulate HDFC Ltd. for opening the Masala Bond market. The success of this debut Masala bond deal can be clearly attributed to the International standing of HDFC Ltd. along with the unparalleled investor access offered by the LSE. I expect this deal to be a milestone in making the overseas markets easily accessible to Indian Issuers and acting as a catalyst in deepening the Indian Bond markets. Being the Joint Lead Manager on this prestigious deal is a very proud moment for us and highlights the position of Axis Bank as a market leader in Indian Capital Markets."

HDFC’s bond listing is the latest in a long line of global firsts for London Stock Exchange Group, including numerous high profile Rupee denominated bond issuances on London Stock Exchange:

  • June 2016 – Axis Bank lists India’s first internationally listed certified green bond & its entire USD 5 billion MTN programme
  • June 2016 - first Chinese sovereign RMB bond issued outside of China lists in London, bringing total number of offshore RMB bonds issued in 2016 alone in London to 54, more than all other offshore RMB markets combined
  • August 2015 - International Finance Corporation (IFC) issues world’s first offshore green Masala bond, raising GBP31 million equivalent
  • February 2014 – IFC lists first Rupee denominated bond, going on to issue a further 3  Masala bonds in London over 2 years

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