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The Reserve Bank of India’s (RBI’s) recent move to align rupee-denominated bonds issuance in line with external commercial borrowing (ECB) will unlikely hamper the growth of the market, but can curtail the ability of low-rated companies to raise funds using the instrument.
The central bank on June 7 said any company raising rupee-denominated bonds of over $50 million equivalent should issue those for a minimum maturity of five years. Also, the all-in cost of these bonds should be 300 basis points over the equivalent-maturity government bonds. According to RBI data, Indian companies raised Rs 33,165 crore through the masala bonds
