Kerala to Tap Masala Bond Market
The state-owned Kerala Infrastructure Investment Fund Board (KIIFB) debuted its ‘masala bond’ issue of Rs 2,150 crore at the London Stock Exchange.
With the issue, Kerala has become the first Indian state to tap into masala bond market. The proceeds from the bond issue are slated to be used to part-finance the rebuilding of infrastructure in Kerala that was devastated by last year’s floods.
The bond issue is part of the Kerala government’s efforts to get multinational corporations to invest in the state, which has traditionally been known for its unfriendly business policies, bureaucratic delays and recurrent industrial strikes.
Masala bonds are the debt papers denominated in rupees sold overseas by an Indian entity to raise funds. The term was coined by the International Finance Corporation (IFC) to evoke the culture and cuisine of India. The first Masala bonds were issued by the IFC in November 2014 to raise 1,000 crores to fund infrastructure projects in India.