The global rupee bond issued by the International Finance Corporation (IFC) was oversubscribed by more than two times, raising prospects of increased dollar inflows and bringing some cheer to the weak rupee.
IFC is a World Bank arm that invests in the private sector.
On Tuesday, the corporation had issued the first tranche of $161 million (Rs 1,000 crore) under its $1-billion Global Rupee Bond Programme against the order for bonds worth Rs 2,060 crore. The proceeds from the rupee-linked bonds will be used to finance private sector investments in the country. The exchange rate risk on the bonds is to be borne by investors.
“In the context of renewed volatility of the Indian rupee in recent weeks, this is a very good outcome and sends a positive medium-to long-term message on the currency and the economy,” a Finance Ministry statement said. A total of 27 global investors participated in the issue. The bonds carry a coupon rate of 7.75 per cent and have a tenure of three years.
The Ministry said that in order to meet the huge need for infrastructure funding, it was crucial to develop the offshore rupee market as an alternative source of dollar funding. shishir.s@thehindu.co.in