The maiden masala bond issue of the National Highways Authority of India (NHAI) received strong response from investors, attracting bids worth over Rs 3,000 crore.
Through the issue, which opened at the London Stock Exchange, NHAI aims to raise Rs 5,000 crore. It was launched by Union Minister Nitin Gadkari.
The proceeds from the rupee-denominated offshore bonds would be used for India's infrastructure projects.
"India gives the highest priority for infrastructure development. Our economy is the fastest growing in the world. NHAI is a flagship organisation, with AAA rating and we have many big projects to offer," Gadkari said at the London Stock Exchange market opening ceremony.
An official of the Road Transport and Highways Ministry said the "initial benchmarked issue of Rs 1,500 crore was upsized to Rs 3,000 crore by 3.00 pm (GMT)" at a price yielding 7.30 per cent annually in view of the highly positive response from the investor market.
The transaction marks the largest ever five year issuance and the largest inaugural transaction in Masala Bond market, the official added.
The bond issue has attracted investors from across the spectrum with Asia contributing 60 per cent of the subscription and the balance 40 per cent coming from Europe.
Further, 61 per cent of the amount comes from the fund managers/ insurance, 18 per cent from the banks and 21 per cent from the private banks.
Gadkari said the NHAI is a financially strong organisation and "this is the first time we have entered the Masala Bond market and I am confident that we will get a good response".
"The total infrastructure picture in India is changing very rapidly and we need financial support from international investors. We can guarantee that all our projects are economically viable, with good rate of return," he said.
In reference to the progress already made, Gadkari pointed to a hike in road construction figures, from just 2 kilometres per day when he took charge of the transport ministry to 23 kilometres a day at the end of March this year.
Elaborating on road construction facts and figures, he said that India had 52 lakh kilometres of road length out of which only 96,000 kilometres is the national highway, meaning that 40 per cent of the country's traffic is concentrated on just 2 per cent of the roads.
The government's target is to increase this length from 96,000 kilometres to 2 lakh kilometres, he said.
"The minister is someone who is a visionary, who gets things done. We are now on a roll with Masala Bonds. London is the financial centre of the world and the right place for more Masala Bond issuances," said Alok Sharma, the Minister for Asia in the UK's Foreign and Commonwealth Office (FCO), at the ceremony.
It was attended by Indian High Commissioner to the UK Yashvardhan Kumar Singh, deputy High Commissioner Dinesh K Patnaik and the NHAI chairman Yudhvir Singh Malik, among others.
"This is a symbolic transaction for a number of reasons. We are hoping it would be the world's largest-ever Masala Bond. This bond will support the largest road building and transport infrastructure programme in the world. There is a huge appetite for investments in Indian infrastructure and confidence in the Indian economy," said Nikhil Rathi, CEO of London Stock Exchange plc, who described Gadkari as a "reformer and innovator."
According to the London Stock Exchange, there are 38 Masala Bonds currently in the market, raising around 5 billion dollars.
During his visit to the UK this week, Gadkari has meetings scheduled with Transport for London (TfL) authorities on road safety and other issues and will also be addressing a UK India Conclave on the theme of 'A New Era in UK-India Relations' before he leaves for India on Saturday. PTI AK MRJ AKJ NAM RR RAM .