"The recent issuance of the first offshore masala bonds by domestic companies could pave the way for a broader opening and development of the market," the agency said today in a note.
Even though the instrument is in its infancy, the two recent issues by mortgage major HDFC and state-run NTPC will mitigate initial market concerns about liquidity, it said, adding the issuance also helped both the companies get better ratings.
It can be noted that HDFC raised Rs 3,000 crore by issuing three-year bonds, while NTPC raised Rs 2,000 crore in a 'green' masala bond issue.
The domestic banks-dependent non-banking financial institutions could particularly benefit from offshore rupee financing, it said, adding even if they come at a higher price, such companies will raise the money as it gives them an opportunity to diversify funding base.
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Electricity utilities with assets operating under a regulated return-on-invested capital model, such as NTPC and transmission utilities, were also listed as "likely candidates" by the agency.
Fitch Ratings also said that it has assigned NTPC Ltd's (NTPC, BBB-/Stable) 7.375 per cent Rs 2,000-crore senior unsecured notes due 2021, payable in US dollars, a final (investment grade) rating of 'BBB-(emr)'.
The notes, labelled "green" - which are to be used for projects with environmental benefits - are issued out of NTPC's USD 4 billion medium-term note programme, Fitch Ratings said in a statement.
It said, investors should note that, while the notes are denominated in Indian rupee, both coupon payments and principal on maturity are settled in US dollars at the prevailing rupee-dollar exchange rate; as such, settlements are subject to transfer and convertibility risk on exchange operations involving the Indian rupee (and thus the rating on the notes can be no higher than India's Country Ceiling, ('BBB-')).