Union Road Transport Minister Nitin Gadkari launches NHAI’s first masala bond in UK

The National Highways Authority of India (NHAI) has raised Rs. 3000 crore through Masala Bonds at London Stock Exchange. Funds raised through these Masala Bonds will be used for constructing roads and transport infrastructure in India.

• The NHAI Masala Bonds issue was launched by Union Road Transport Minister Nitin Gadkari on May 11, 2017, in London. The launch ceremony was attended by Yudhvir Singh Malik – Chairman of NHAI, Yashvardhan Kumar Singh – Indian High Commissioner to the UK and Dinesh K Patnaik – Deputy High Commissioner.

More Details about NHAI Masala Bonds:

• Initially, issue size of NHAI Masala Bonds was Rs. 1500 crore. Owing to positive response from investors, the issue size was raised to Rs. 3000 crore.
• These bonds will give 3% annual returns to investors.
• It is the largest ever 5-year issuance and also the largest inaugural transaction so far in the masala bond market.
• 60% subscribers of these bonds are Asian entities, whereas 40% are European entities.
• Fund managers and Insurance companies subscribed 61% of the issue. The remaining amount was subscribed by Banks.

About Masala Bonds:

Bonds issued outside India but denominated in Indian Rupees, rather than the local currency are referred to as Masala Bonds.

• The first Masala bond was issued by International Finance Corporation (supported by World Bank) in November 2014, which raised Rs. 1,000 crore for infrastructure projects in India.
• In 2017 itself, five masala bonds worth $ 135 million have been listed in London.
• As per data provided by London Stock Exchange, 35+ masala bonds worth $5 billion have been listed so far.

Road Construction in India:

Out of current road length of 52 lakh km in India, national highways comprise 96000 km.

• The Govt. has set a target to increase national highways length to 2 lakh km.
• At the end of March 2017, speed of road construction stood at 23 km a day.

Quick Facts about National Highways Authority of India (NHAI):

• Formation Year: 1988
• Headquarters: New Delhi
• Parent Ministry: Union Ministry of Road Transport and Highways
• Current Chairman: Yudhvir Singh Malik