What are Masala Bonds?

Home
jargons
what are masala bonds
undefined

Masala Bonds are rupee-denominated bonds. These bonds are issued by Indian entities in foreign markets. The term 'masala', which means spices in Hindi, was used to add some Indian context to the bond and increase the familiarity of Indian culture on foreign platforms. Masala Bonds help in internationalising the Indian currency. It further helps in raising funds for infrastructure projects in India and boosts internal growth via foreign investors. The first Masala bond was issued in 2014 by International Finance Corporation (IFC).

These Masala Bonds are issued directly in Indian rupees. So, the buyer of the bond (investor) will take the Indian currency risk or exchange rate risks. Now, if the Indian currency becomes weak and falls, the foreign investor has to bear losses. On the other side, the issuer of these Masala Bonds (which is an Indian entity) won’t be bearing any risk.

Main features

  • Masala Bonds can be issued privately or registered on a stock exchange.
  • The minimum maturity period for bonds up to USD 50 million is 3 years and for others, it is 5 years.
  • A masala bond can be worth a maximum of $750 million.

Companies with a Masala bond issued

Name of the companyIssue SizeListed
International Finance Corporation (IFC)Rs 200 CroreLondon Stock Exchange
HDFCRs 3,000
Crore
London Stock Exchange
Yes BankRs 315 croreLondon Stock Exchange
NTPCRs 2000
Crore
Singapore Stock Exchange

Post your comment

No comments to display

    Honeykomb by BHIVE,
    19th Main Road,
    HSR Sector 3,
    Karnataka - 560102

    linkedIntwitterinstagramyoutube
    Crafted by Traders 🔥© marketfeed 2023