In the first ever 'masala bond' issue, housing finance major HDFC has raised Rs 3,000 crore through these rupee-denominated bonds that got over-subscribed by 4.3 times.
The Rs 3,000-crore issue of unsecured rupee-denominated bonds bears a fixed semi-annual coupon of 7.875 percent per annum and has a tenor of 3 years and 1 month, HDFC said in a statement.
The all-in annualised yield to the investors is 8.33 percent per annum, it said, adding this rate is five basis points lower than the last domestic issue by HDFC on July 12, 2016.
The rupee-denominated bonds or masala bonds are instruments through which Indian entities can raise funds by accessing overseas capital markets, while the bond investors hold the currency risk.
The London Stock Exchange in a release said that the "landmark bond issuance from the Housing Development Finance Corp (HDFC) was oversubscribed 4.3 times".
It paves the way for the opening of the 'masala bond' market globally to support Indian company and infrastructure financing, the stock exchange said.
"Today's masala bond issuance by HDFC is a world first and London Stock Exchange is proud to be the partner of choice for this landmark event for Indian finance," said Nikhil Rathi, CEO, London Stock Exchange plc & director of international development, London Stock Exchange Group.
"The company is the first Indian corporate issuer of Rupee Denominated Bonds overseas pursuant to applicable RBI guidelines," HDFC said.
This is a rupee-based transaction and there is no foreign exchange exposure and bonds will be listed on the London Stock Exchange and cannot be traded in the local Indian market.
The issue proceeds would be used for the housing finance business of HDFC as well as for general corporate purposes, it said.
"We have successfully achieved our objective of attracting a global pool of capital to further diversify our borrowing profile," HDFC Chairman Deepak Parekh said.
The deal was announced on July 11, 2016 with an initial size expectation of Rs 2,000 crore with a green shoe option of Rs 1000 crore.
The final order book was Rs 8,673 crore from 48 accounts, which reflects healthy investor appetite for Indian credit as well as for Rupee Denominated Bonds, it said.
Final allocations were well diversified, with 86 percent taken by Asian investors and European investors taking the remainder. Institutional investors made up 82 percent of allocations and private banks 18 percent.
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