The International Finance Corporation (IFC) has increased its exposure limit by USD 50 million in the rupee-denominated Indian bonds, which was set up to promote capital market and encourage foreign investment.
This is the second increase to the IFC global rupee bond, which was issued in November 2013 under the USD 1 billion IFC global rupee bond programme.
With this increase the total outstanding amount of the bond reached Rs 2,300 crore (about USD 380 million).
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The investors in these bonds include asset managers and insurance companies in the US and Europe.
The bonds, which carry a coupon rate of 7.75 per cent, matures on December 3, 2016.
IFC global rupee bonds are denominated in Indian rupee but settled in US dollars, with all principal and coupon payments tied to the US dollar-rupee exchange rate.
IFC converts bond proceeds from dollars into rupees on the domestic spot exchange market, and uses the rupees to invest in the country.
Over the years, IFC has issued bonds in 14 local currencies, including the Brazilian real, the Chinese renminbi, the Nigeria naira, and the Russia ruble.
When issuing local-currency bonds, IFC works closely with regulators and market participants to refine the regulatory framework, encouraging greater participation in the local markets and providing a model for other international issuers.
India accounted for USD 4.5 billion of IFC's committed investment portfolio as of June 30, 2013 - more than any other country.
In 2012-13 fiscal, IFC invested USD 1.38 billion in India to achieve several strategic priorities such as promoting inclusive growth in India's low-income states, addressing climate change, and supporting global economic integration.
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in more than 100 countries, the institution uses its capital, expertise, and influence to help eliminate poverty.
