NHAI eyes $750 mn via green masala bonds, to list on LSE

National Highways Authority of India (NHAI) plans to raise up to USD 750 million through green masala bonds that will be listed on the London Stock Exchange soon.
Housing finance major HDFC has become the first Indian company to list masala bonds -- denominated in Indian rupees -- on the London Stock Exchange and raised Rs 3,000 crore.
"We plan to float what we say green masala bond in a month and aim to raise between USD 500 million to USD 750 million in the first tranche," NHAI Chairman Raghav Chandra told PTI after LSE CEO Nikhil Rathi called on him here.

Rathi was accompanied by LSE Asia head Jasmine Arora.
"Both LSE CEO and Asia head discussed listing of NHAI green masala bonds there and explained how HDFC has gained from listing masala bonds there with an annual yield of 8.33 per cent," Chandra said.
NHAI is moving forward with a detailed plan that will be ready soon. The offering, called green masala bond, is named so as the stress is on greening of highways besides other such programmes.

According to the NHAI chief, there is a huge appetite for masala bonds and the proceeds can be utilised to further accelerate the highway building pace.

Masala bonds are named after famous Indian spices and are instruments through which Indian entities can raise funds by accessing overseas capital markets while the bond investors hold the currency risk.
NHAI needs to raise about Rs 50,000 crore this year from the market to fund projects.
The Road Transport and Highways Ministry has set an ambitious target of building 15,000 km of roads and award projects for another 25,000 km in the current financial year, about two-and-a-half times higher than last year's.
NHAI is also in negotiations with the Life Insurance Corporation (LIC) to access long-term funds.
Masala bonds were issued initially by the International Finance Corporation (IFC), a member of the World Bank group, in 2014 to raise money for private sector infrastructure projects in India.

In September 2015, RBI issued guidelines allowing Indian corporates, NBFCs, real estate investment and infrastructure investment trusts to issue such bonds.
These masala bonds are listed on the international market and offered and settled in US dollars, providing easier access for foreign investors.