Money & Banking

IFC will tap domestic market to raise funds for infra projects

Satyanarayan Iyer N. S. Vageesh Mumbai | Updated on December 05, 2013

Serge Devieux, Director (South-Asia), IFC

International Finance Corporation (IFC), a World Bank Group member, said it will raise money from domestic investors by issuing rupee bonds in India shortly.

The money raised by issuing such bonds will be used to lend to infrastructure projects in the country. The issue size will be decided by IFC after discussions with government officials.

Serge Devieux, Director (South-Asia), IFC, said: “We are looking at what we can do to raise local currency to raise money for infrastructure.”

The local bonds will be long-term in nature and would have maturity periods ranging from 8-15 years, he said.

“For the local rupee bonds, we will meet Government officials in Delhi on Friday. It will take some time. It will be issued in the first quarter of 2014 if market conditions are apt,” Devieux said.

Offshore rupee bonds

This comes in the wake of its offshore India rupee bond, which it announced in October this year.

Recently, IFC raised Rs 1,000 crore (about $170 million) through offshore rupee bonds as part of its $1 billion offshore rupee bond programme. Most of the investors who put their money in the offshore bond programme were institutions, pension funds and insurance companies.

These bonds, of three-year tenor, offered 7.75 per cent interest. IFC said that the exchange rate risk arising out of such instruments will be borne by investors.

The next tranche of the offshore rupee bond, Devieux said, will probably be of a longer tenure.

IFC hopes to raise $4-5 billion by issuing bonds of different tenors.

Published on December 05, 2013

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