London Stock Exchange issues biggest ever rupee bond

The London Stock Exchange’s biggest ever rupee bond worth £103 million was issued earlier this week by the International Finance Corporation.

India and the UK have been working hard to cement their already close economic and financial relationships after all the latter is the biggest investor in the former among the G20 nations. But, this week, they have edged even closer together.

The International Finance Corporation (IFC) has issued a major new rupee bond in London today – the biggest of its kind ever issued on the London Stock Exchange (LSE).

The 10 billion rupee bond (£103 million) has a maturity of ten years, which also makes it the longest issue ever for an offshore rupee bond. It’s part of a bid to attract investors to the nation, using the capital markets to support infrastructure investment in India.

The proceeds are set to be used to support Axis Bank’s upcoming infrastructure bond issue – which will in turn go a long way towards stimulating projects that not only create jobs and economic activity, but also set the stage for further development in the future.

According to IFC, the “Masala bonds” represent a great opportunity to get funds flowing into one of Asia’s biggest economies.

“This bond issue demonstrates the powerful role that capital markets can play in linking international savings to infrastructure investment,” says Jin-Yong Cai, IFC executive vice-president and chief executive. “The strong demand from investors signals continued momentum for the Indian economy.”

However, the fact that the bond was issued in London is crucial enough for the UK capital – especially as the government seeks consolidate the city’s status as a global financial hub.

“As we continue to strengthen Britain’s relationship with India, the IFC’s bond issue in London is welcome news, and is testament to our position as a global financial centre,” says exchequer secretary to the Treasury Priti Patel.

She adds that during recent talks between chancellor George Osborne and India’s finance minister Arun Jaitley, infrastructure and financial services were two of the areas identified as having the biggest potential for partnerships between the UK and India.

Last month saw the launch of the India-UK Financial Partnership, intended to promote financial services trade and investment between the two countries.