HDFC, a leading bank of India has become the first private company from India to issue a rupee-dominated bond abroad, raising £340mn (Rs 30bn) in London.
High Commissioner of India, Navtej Sarna joined MP Alok Sharma, Parliamentary Under Secretary of State at the Foreign Commonwealth Office (FCO) and Mr. Deepak Parekh, Chairman, HDFC to launch India’s first corporate Masala Bond at the London Stock Exchange early morning of Monday 1 August 2016.
The launch of the off-shore rupee denominated Masala Bond by HDFC follows Prime Minister Modi’s statement during his visit to UK in November 2015 that Indian entities would use London Stock Exchange to launch rupee denominated bonds to attract investments required for infrastructural development in India.
Speaking on the occasion, High Commissioner Sarna reiterated the importance attached by Prime Minister Modi as well as the UK Government to strengthening financial business and investment links between India and the UK. Sarna also emphasized that the successful launch of these bonds testifies to global confidence in India’s growth story as well as to strengthen confidence of India-UK relations.
So far 30 off-shore Indian rupee bonds have been listed on the London Stock Exchange raising equivalent to US$ 3.5 billion. Other Speakers also expressed the hope that this landmark bond issuance by HDFC would pave the way for opening of the Masala Bond market globally to support Indian companies and infrastructure financing.
Philip Hammond, the Chancellor said the deals showed “Britain is open for business."
“I am delighted that HDFC has chosen to list this landmark bond in London. 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 follows the launch of several bonds denominated in China's renminbi- known as dim sum bonds- as well as Islamic bonds or sukuk in London.
HDFC issued this three year masala bond, pays an interest rate of 8.33% and has a market value of 2.18 trillion rupees, equivalent to roughly £25bn.
Several public sector bodies have also issued Masala bonds in London, including one of the World Bank arms and the Indian railway system.
