NHAI Masala Bond’s Launch at London Stock Exchange

The Union Minister of Road Transport & Highways and Shipping Nitin Gadkari launched the NHAI Masala Bond issue at the London Stock Exchange.

The NHAI issue witnessed an overwhelming response from a wide range of investors, some of them being first timers to participate in the Masala Bond market.

The initial benchmarked issue of INR 1500 crore was upsized to INR 3000 crore at a price yielding 7.30% annually in view of the highly positive response from the investor market.

The transaction marks the largest ever 5 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 in the near future.

It is interesting to note that the NHAI Masala Bond issue has attracted investors from across the spectrum with Asia contributing 60% of the subscription and the balance 40% coming from Europe.

Further, 61% of the amount comes from the Fund Managers or Insurance, 18% from the Banks and 21% from the private banks.

The spectrum of investors shows bright prospects of the Masala Bond as an instrument of raising rupee denominated resources internationally. On this occasion London Stock Exchange presented a Memento to Shri Nitin Gadkari.

Masala Bonds are a major initiative being encouraged by Indian Government . They have been gaining in 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.

What Indian companies need to do now, is to access the Masala Bond market to enhance its liquidity and give international investors the opportunity of exposure to the Indian Rupee.

It is with this objective that the National Highways Authority of India (NHAI) decided to access the Masala Bond Market.

Given its strong linkages to the Government of India and its strategically important role for the national economy, the NHAI is uniquely placed to help attract the widest possible investors to the Masala Bond market and help develop it.

Towards this objective NHAI has been conducting a global investor engagement exercise targeted at the world’s largest Supra Nationals and Sovereign Wealth Funds, Global Macro Funds and International Asset Managers This exercise is expected to culminate in London.