HDFC adds a dash of Masala to the London Stock Exchange
India’s largest private sector mortgage lender Housing Development Finance Corporation (HDFC) opened the London Stock Exchange to celebrate the listing of the world’s first Masala bond by an Indian corporate.
The landmark bond issuance from HDFC, one of India’s leading banking and financial services companies was 4.3 times oversubscribed and paves the way for the opening of the Masala bond market globally to support Indian company and infrastructure financing.
The 37 month dated Rupee denominated bond raised INR 30 billion, equivalent to USD 450 million, with an annual yield of 8.33% and secured global investor support. The bond will help HDFC to diversify its borrowing profile and access global investors. The listing follows Prime Minister Narendra Modi’s announcement of USD 1 billion equivalent of Masala bond issuance in the UK, made during his visit to London in 2015.
London Stock Exchange has a strong track record of supporting Masala bond issuance by supranational institutions on its markets.
Philip Hammond, Chancellor of the Exchequer said: “I’m delighted that HDFC has chosen to list this landmark bond in London. It represents a major vote of confidence in London as the leading global financial centre and is further proof that Britain is a great place to do business. This deal signifies a strengthening of the already close economic ties between the UK and India and paves the way for further masala bonds to be listed in the UK. It is a taste of things to come.”
Nikhil Rathi, CEO, London Stock Exchange plc & Director of International Development, London Stock Exchange Group said: “London Stock Exchange is honoured to host the world’s first ever Indian corporate masala bond, a landmark event for Indian finance and looks forward to building a long-term partnership with Indian issuers. Taking advantage of the efficient listing process and tapping the global markets in London, global issuers can access a new vital channel of international finance and investors around the world without foreign exchange risk. We congratulate HDFC, on this landmark listing: a major success for the Financial Partnership between Britain and India.”
Deepak Parekh, Chairman, HDFC said: “The listing of these bonds on London Stock Exchange gives us immense pride. Besides being one of the largest stock exchanges in the world, London Stock Exchange has a rich legacy which dates back to over 300 years. London Stock Exchange continues to distinguish itself by offering a wide range of financial instruments and enjoys unshakable trust from international investors. Considering that this was the first issue of its kind in a global financial centre by an Indian Company, the authorities were forthcoming and supportive.”
Mr Alok Sharma MP, UK Minister for Asia and the Pacific said: “I very warmly welcome HDFC’s choice of the London Stock Exchange to list this world-first rupee bond, a clear signal of London’s standing as the leading international financial centre. The tremendous investor demand demonstrates the UK’s pivotal role in financing India’s growth and further strengthens the close economic ties between the UK and India. I am confident that this will pave the way for many more Indian companies to raise capital in London to support India’s ambitious infrastructure plans.”