Masala bonds are instruments through which Indian entities can raise funds by accessing overseas capital markets, while the currency risk is held by bond investors.
The first-ever such issue has been over-subscribed by 4.3 times. The unsecured rupee-denominated bonds bear a fixed return of 7.875 per cent per annum.
As per a statement issued by HDFC, the all-in annualised return to the investors is 8.33 per cent per annum "The company is the first Indian corporate issuer of Rupee Denominated Bonds overseas pursuant to applicable RBI guidelines," the statement added.
The bonds will be listed on the London Stock Exchange and cannot be traded in the local Indian markets. The transactions will be rupee-based and there is no foreign exchange exposure.
HDFC has said that the capital raised from this issue would be used for the housing finance business of HDFC as well as for general corporate purposes.
"We have successfully achieved our objective of attracting a global pool of capital to further diversify our borrowing profile," HDFC Chairman Deepak Parekh said.
The Rs 3,000 crore deal was announced by HDFC on July 11 but the final order book was Rs 8,673 crore from 48 accounts. This signals that investors have a strong faith for Indian credit as well as for Rupee Denominated Bonds.
Final allocations were well diversified, with 86 per cent taken by Asian investors and European investors taking the remainder. Institutional investors made up 82 per cent of allocations and private banks 18 per cent.
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