The International Finance Corporation (IFC), a World Bank arm, on Friday raised R2,000 crore through its issue of global rupee-denominated bonds to promote capital market development and encourage foreign investment.
This is the largest offshore rupee-denominated bond issue till date and the issue has received orders worth R2,500 crore. Two-thirds of the buyers are from US and European asset managers, insurance companies and private banks.
The bonds carry a coupon rate of 7.8% and have tenure of five years.
Deutsche Bank, JP Morgan, and TD Securities acted as lead managers for the bond.
?IFC?s five-year global rupee bond comes to market at a time when foreign investors are seeing renewed opportunity in India?s capital markets,? said IFC vice-president and treasurer Jingdong Hua in a statement. ?The bond supports this momentum while providing a unique bridge that links international investment with India?s private sector financing needs.?
The issuance brings nearly $815 million, the amount of notes issued under IFC?s $1-billion global rupee bond programme launched last year.
In FY13, IFC invested $1.38 billion in India to achieve several strategic priorities such as promoting inclusive growth in low-income states, addressing climate change and supporting global economic integration.
IFC global rupee bonds are denominated in rupees 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.
Under the programme, IFC also has a three-year outstanding bond of R3,000 crore.
