UK Chancellor Philip Hammond described the "landmark" listing by the Housing Development Finance Corporation (HDFC) as a "major vote of confidence" in London.
HDFC is the first company to issue a bond of this type, whichraised Rupees 30 billion, equivalent to around USD 450 million. It has a maturity of three years and an annual yield of 8.33 per cent and was more than four times oversubscribed.
"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. Britain is open for business and one of the most attractive places in the world for foreign investment," he said.
Masala Bonds are rupee-denominated bonds issued to overseas buyers.
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As many as 30 offshore Indian rupee bonds have listed in total on London Stock Exchange, raising equivalent to approximately USD 3.5 billion dollars, according to one of the world's leading stock exchanges.
"The tremendous investor demand demonstrates the UK's pivotal role in financing India's growth and further strengthens the close economic ties between the UK and India.
I am confident that this will pave the way for many more Indian companies to raise capital in London to support India's ambitious infrastructure plans," Sharma said.
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.
HDFC chairmanDeepak Parekh said thelisting of India's largest private sector mortgage lender's bond on London Stock Exchange was the result of"unshakable trust from international investors" in the exchange.
"While we did explore other markets for listing, the responsiveness and efficiency with which the officials at the UKLA (UK securities regulator) and London Stock Exchange responded to our urgent requirements was remarkable.
Considering that this was the first issue of its kind in a global financial centre by an Indian company, the authorities were forthcoming and supportive," Parekh said.
Stock Exchange is honoured to host the world's first ever Indian corporate Masala bond, a landmark event for Indian finance and looks forward to building a long-term partnership with Indian issuers.
"Taking advantage of the efficient listing process and tapping the global markets in London, global issuers can access a new vital channel of international finance and investors around the world without foreign exchange risk."
HDFC rang the opening bell for trading at the London Stock Exchange today to mark the launch.
Newly-appointed Prime Minister Theresa May's government has been making all efforts to promote the UK's trade ties after Britain voted to leave the European Union in June.