Union Minister of Road Transport and Highways Nitin Gadkari on Thursday launched the National Highways Authority of India (NHAI) Masala Bond here at the London Stock Exchange.
The NHAI witnessed an overwhelming response from a wide range of investors, some of them were first timers to participate in a Masala Bond market.
The initial benchmarked issue of Rs. 1,500 crore was upsized to Rs. 3,000 crore at a price yielding 7.30 percent annually in view of the highly positive response from the investor market.
The transaction marks the largest ever in five year issuance and the largest inaugural transaction in Masala Bond market.
Some of the leading investors were still showing interest in the NHAI issue who may be brought into the fold shortly.
Masala Bonds are a major initiative being encouraged by the Centre, as they have been gaining popularity among foreign investors.
Until recently, the ability of Indian companies and other issuers to borrow from the overseas markets was predominantly limited to foreign currencies, but Masala Bonds have finally taken off, giving Indian companies from various sectors the ability to access the international capital markets and raise financing without taking on the attendant exchange rate risk.
The NHAI has been conducting a global investor engagement exercise targeted at the world's largest sovereign wealth funds, global macro funds and international asset managers, with London the latest stop in this worldwide agenda.
The rupee-denominated offshore bonds, popularly known as Masala Bonds, got a tax benefit in the budget for 2017-18. The instrument has been exempted from taxation for transfer among non-residents, while a low rate of five percent would be applicable for investors till 2020.
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