India to approve ADB’s $1 billion rupee bond soon
ADB will use the money to fund projects by private firms
Mumbai: The Indian government will soon approve a rupee-denominated bond issued by a multinational agency in the next few days, making it the second such bond in recent times.
Asian Development Bank (ADB) wants to sell a rupee-denominated bond, similar to the one issued by International Finance Corp. (IFC), an arm of the World Bank, K.P. Krishnan, additional secretary, department of economic affairs, said on Monday.
The approval is likely by the end of this month, Krishnan said.
Last month, IFC raised $1 billion by selling rupee-denominated bonds to international investors.
“The size also will be on similar lines," Krishnan said on the sidelines of a conference on the corporate bond market organised by Confederation of Indian Industry (CII), a lobby group.
ADB has proposed that the initial repayment of the principal amount and coupon will be in dollars but will depend on the dollar to rupee exchange rate.
ADB was looking to raise funds by sellling rupee bonds, Narhari Rao, officer in-charge of India, said in November. The Manila-based agency will use the money to fund projects by private firms, Rao had said.
IFC will convert the proceeds from the bond issue from dollars into rupees on the domestic spot exchange market and then invest in India.
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