Masala Bonds momentum
An estimated top 100 Indian corporations will raise project financings through Masala bonds in the coming years with power group, NPTC Ltd, starting a road show for US$500-$700 million from November.
The Indian corporations will be heading for international financing through bonds as the government wants them to raise funding from international and domestic markets, said Singapore Exchange (SGX) President Muthukrishnan Ramaswami, declaring SGX as a Masala Bond Hub on September 26, 2016.
The 100 list is led by NTPC which will host roadshow in London, Hong Kong and Singapore from Novembe, said its director of finance and chief financial officer, Kulamani Biswal.
Proceeds from the bonds will be for financing several projects under construction, he disclosed.
In August, NPTC raised more than USD300 million in August this year through Green Masala Bonds for solar projects. These bonds are listed on SGX.
India needs US$400-$500 billion over the next five years to finance its massive infrastructure developments, especially bonds for revenue generating projects such as the power plants and toll roads-highways, according to industry estimates.
NTPC’s annual capital expenditure is more than USD4.5 billion for FY2016-17, up from US$3.74 billion a year ago. It aims to raise US$835 million from international financial markets for the current year.
Following NTPC will be the National Highway Authority of India which aims to seek US$750 million in Green Masala Bonds, and Indian Railways which has sought Finance Ministry approval for issuing US$500 million of Masala Bonds.
Adani Trasnmission Ltd, HDFC Limited and Indiabulls Housing Finance Ltd have issued Masala Bonds so far since Reserve Bank of India approved regulation for raising funds through these instruments in April 2016.
To date, the five Masala bonds issued globally have drawn Rs83.3 billion, starting with the first issue in July this year.
As the Masala bond market grows, SGX stands ready to support future listings of these bonds, with investor demand from Asia contributing significantly to demand for these issuances, assured Ramaswami.
“We want to be the gateway for India for bonds and derivatives which can be accessed by international investors,” said Ramaswami of SGX’s aim to be home to Global Masala Bonds. fii-news.com
