Coimbatore, Jan 15 The International Finance Corporation (IFC) has hiked by Rs 10 billion (approximately $161 million or Rs 1,000 crore) an outstanding three-year global Indian rupee bond “to promote capital market development and encourage foreign investment in India’’.
In a release issued simultaneously in Washington and New Delhi on January 14, IFC, which is a part of the World Bank Group, said that the decision has doubled the amount of the first IFC global rupee bond which was issued in November 2013 under the $1-billion IFC global rupee bond programme.
It said the transaction was increased from Rs 3 billion (Rs 300 crore) “in response to strong investor demand’’.
The investors included “asset managers, private banks, insurance companies, and central banks in Asia, Europe and the US,’’ the release added.
According to Monish Mahurkar, IFC Director for Treasury Client Solutions, the strong market response to the second IFC global rupee bond signalled “continued investor interest to rupee exposure’’.
He said attracting foreign investment was key as IFC continued to work with the Indian authorities “on deepening the rupee capital markets and providing an alternative source of rupee financing for investment in the country’’.
While the global rupee bonds were denominated in Indian rupee, they were settled in US dollars with the principal and coupon payments linked to the $-INR exchange rate. The bond proceeds were converted from US currency into Indian currency on the domestic spot exchange market and used to invest in India.
The release said that India was the largest beneficiary of IFC’s investment, accounting for $4.5 billion of its “committed investment portfolio’’ as of June 30, 2013 that was “more than any other country’’.
During FY2013, IFC had invested $1.38 billion in the country to achieve “several strategic priorities such as promoting inclusive growth in India’s low-income states, addressing climate change, and supporting global economic integration’’, IFC said.
The transaction was facilitated by JP Morgan and TD Securities who were the lead managers.