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Kerala Infrastructure Investment Fund Board to float masala bonds to woo NRIs

Masala bonds to be floated in London and Singapore exchanges target non-resident Indians, the minister said after chairing the KIIFB executive committee meeting here on Wednesday.

Published: 26th April 2018 01:29 AM  |   Last Updated: 26th April 2018 06:51 AM   |  A+A-

By Express News Service

THIRUVANANTHAPURAM: The Kerala Infrastructure Investment Fund Board (KIIFB) will float masala bonds, rupee-denominated debt securities sold abroad, to mobilise at least Rs 5000 crore, Finance Minister Thomas Isaac has said.

Masala bonds to be floated in London and Singapore exchanges target non-resident Indians, the minister said after chairing the KIIFB executive committee meeting here on Wednesday.

Masala bonds have the advantage that it do not have exchange rate risk unlike foreign currency-denominated bonds, Isaac said. Interest rate will also be low because interest rates in Europe are generally low.

Isaac said Singapore was a leading platform for India's funding needs. The country also has a significant population of affluent NRIs.

Axis Bank and Chartered Bank were selected through a fair tender procedure to assist KIIFB in floating masala bonds. Axis Bank is an authorised dealer of masala bonds. International rating agencies Fitch Rating and S&P Global Rating have been tasked with the credit rating.

KIIFB will disburse Rs 10,000 crore this fiscal for different development projects. The executive committee meeting approved 68 projects with a total investment of Rs 2,042.13 crore. With this, KIIFB has approved a total of 367 projects with a total worth of Rs 22,051.39 crore.

The Pravasi Chitty, another fund source for KIIFB, will be launched in the third week of May. Its launch will coincide with the second anniversary of the LDF government. Rs 10,000 crore is expected from Pravasi Chitty.

Among the projects approved in the meeting is the Hill Highway project worth Rs 878.49 crore. Already 700 km of the Hill Highway was completed. He urged people to donate land for hill highway development. ''Owners should realise that the highway will increase the value of their remaining holdings," he said.

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