First ‘masala’ rupee bond listed on London stock exchange

  • Prasun Sonwalkar, Hindustan Times, London
  • Updated: Aug 01, 2016 17:33 IST
British finance minister Philip Hammond has welcomed the issuance of the first offshore rupee-denominated bond from HDFC. (AFP file)

The first rupee-denominated bond issued outside India by an Indian company – termed “masala” bond – was listed on the London stock exchange on Monday, delivering one of the commitments made during Prime Minister Narendra Modi’s visit last November.

Chancellor Philip Hammond welcomed the landmark listing by the Housing Development Finance Corporation (HDFC) as it was launched when the markets opened. The event was attended by Indian high commissioner Navtej Sarna and others.

The bond raised Rs 30 billion, equivalent to $450 million. It has a maturity of three years and an annual yield of 8.33%. It was more than four times oversubscribed, with significant interest from Asian investors, officials said.

Hammond said: “It represents a major vote of confidence in London as the leading global financial centre and is further proof that Britain is a great place to do business.

“This deal signifies a strengthening of the already close economic ties between the UK and India and paves the way for further masala bonds to be listed in the UK. It is a taste of things to come.”

HDFC chairman Deepak Parekh said: “The listing of these bonds on London Stock Exchange gives us immense pride. While we did explore other markets for listing, the responsiveness and efficiency with which the officials at the UKLA (UK Listing Authority) and London Stock Exchange responded to our urgent requirements was remarkable.”

Union power minister Piyush Goyal had announced in April that rupee bonds worth $1 billion would be listed in London by Indian public sector corporates. Green bonds in US dollars were previously listed by International Finance Corporation and Axis Bank.

Alok Sharma, minister for Asia in Britain’s foreign office, said: “Delivering on the commitments of Prime Minister Modi’s historic visit to the UK, this launch reaffirms that the UK is a natural partner for India not only in our strong economic ties but also through the vibrant and 1.5 million-strong Indian diaspora in Britain.”

Nikhil Rathi, CEO of London stock exchange, said the exchange looked forward to building a long-term partnership with Indian issuers.

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