Masala bond market heating up after RBI quota shift

IREDA has launched a $300 million deal and at least three more Indian issuers want to follow after foreign investment limits were lifted. Tax remains a hurdle though.

Indian government agencies and corporates are looking to revive their funding plans to issue offshore rupee-denominated bonds, also known as masala bonds, after the Reserve Bank of India last week removed the ban on foreign investment.

Indian Renewable Energy Development Agency IREDA, a state-run power producer, launched a Reg S, five-year green bond issue early on Thursday that could raise as much as $300 million. And at least three other issuers, including Power Finance Corp., India Railway Finance Corp., Rural Electrification Corp., and Shriram Transport Finance are meeting this week with investors in Hong Kong, Singapore, and London, aiming to raise from $150 million...

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