9-May-2017: NHAI’s Masala Bond expected to list on the LSE shortly

The Minister of Road Transport & Highways and Shipping Shri Nitin Gadkari has been invited by the London Stock Exchange to address its guests and the media on the Government of India’s initiatives in infrastructure and opportunities for investors to participate in India’s growth story. The Minister will also open the market for the LSE for trading on the 11th of May 2017.

Shri Gadkari’s trip may also coincide with the culmination of the NHAI’s debut Masala Bond issuance which is expected to list on the LSE shortly.

Masala Bonds are a major initiative being encouraged by our Government . They have been gaining in popularity among foreign investors. Until recently, the ability of Indian companies and other issuers to borrow from the overseas markets was predominantly limited to foreign currencies, but Masala Bonds have finally taken off, giving Indian companies from various sectors the ability to access the international capital markets and raise financing without taking on the attendant exchange rate risk. What Indian companies need to do now, is to access the Masala Bond market to enhance its liquidity and give international investors the opportunity of exposure to the Indian Rupee.

It is with this objective that the National Highways Authority of India (NHAI) decided to access the Masala Bond Market. Given its strong linkages to the Government of India and its strategically important role for the national economy, the NHAI is uniquely placed to help attract the widest possible investors to the Masala Bond market and help develop it. Towards this objective NHAI has been conducting a global investor engagement exercise targeted at the world’s largest Supra Nationals and Sovereign Wealth Funds, Global Macro Funds and International Asset Managers This exercise is expected to culminate in London.

16-Feb-2017: RBI allows multilateral Financial Institutions to invest in masala bonds.

Reserve Bank of India (RBI) has allowed multilateral and regional financial institutions to invest in rupee denominated bonds listed abroad popularly known as masala bonds.

These new class of investors will be given a wider choice for Indian issuers abroad. In order to provide more choices of investors to Indian entities issuing rupee denominated bonds abroad, it has been decided to also permit multilateral and regional financial institutions where India is a member country, to invest in these rupee denominated bonds.

As a result, agencies like the Asian Development Bank and the BRICS led New Development Bank can also invest in these bonds. Since September this year from when these bonds were allowed Indian firms have together raised $1.71 billion by selling these so called masala bond which are mostly listed in London.