What are Masala Bonds?
Masala Bonds, as the name appears very interesting, some people have a very wrong notion. People might think that, such bonds can have a number of offerings, but this is not the case. Actually as the literal meaning for the term goes, Masala Bonds would refer to the bonds which are issued outside the country of India.
Characteristics of the Masala Bonds
Some of the commoners do have a number of questions as far as the characteristics of the Masala Bonds are concerned. One of the major aspects remains to be that, the denomination is available in the Indian rupees. The name ‘Masala Bonds’, remain to be chosen in order to represent the culture and cuisine of India. The risk for investing with such bonds remains to lie with the investor.
Who had issued such bonds in the first place?
As per available information from the experts, masala bonds are issued by the World Bank in public interest. In August 2015, the first green masala bonds were issued in order to encourage the public investments.
What are the major purposes of such bond issuance?
The major purposes of such kind of bond issuance remain to be gaining on public investments. Again most of the common people ask some weird questions in this respect. This is that, most of the bonds that are issued by the Indian as well as the international authorities are released to encourage public investments. Therefore, what are so special about the masala bonds altogether? Experts had said that, masala bonds are brought in the market in order to cater to specific project based fundings. For instance, the green bonds were released by the Indian Finance Corporation in order to address the funding of the projects related to climate change.
Who had first raised such bonds in India?
As per the data available, it is understood that, HDFC had raised one of the first masala bonds during the month of July 2016. Such bonds were valued at Rs 3000 crores. In the same year, in the month of August, National Thermal Power Plant ( NTPC) had had been one of the pioneers in issuing the first corporate bond in the category of ‘Green Masala Bonds’. At that point of time, such green masala bonds were worth of Rs 2000 crores.
What is the difference between Indian masala bonds and China based masala bonds?
One of the major areas of difference lies in the fact that, Chinese bonds are actually Yuan- denominated which is supposedly their local currency. Whereas the Indian counterpart happens to be available in rupee denomination. Similarly, while talking about Japan, it is important to note that, such bonds are denominated as Samurai.
Where are the bonds listed for the investors’ preference?
As per the available information from the experts, it is noted that listing of the investment bonds remains to be in nodal bodies such as National Stock Exchange. Such listings are available with price details as well. This is of course a useful gesture, so as to make the investors’ understand the worth of their investments.