//Masala bond market revives as rupee gains and tax cut lures buyers

Masala bond market revives as rupee gains and tax cut lures buyers

A rebound in the and a government policy to boost the currency are helping to revive sales in the small market for

HDFC, India’s largest mortgage lender, last week raised Rs 10 billion ($145 million) through a sale of the offshore notes, the first in the market since November. Kerala Infrastructure Investment Fund Board is also marketing its first such benchmark-sized Masala, in a market that has struggled since its emergence in 2015.

After a rout in last year, the government in September unveiled a break for non-resident buyers of as part of measures to boost the local currency. A rebound in the following the US Federal Reserve’s pause in rate hikes, and the expiration of the exemption at the end of March, is helping boost the appeal of the notes.


“The central bank has ensured the currency is stable, which has given international the confidence to buy including Masala bonds,” said Ajay Marwaha, portfolio manager at Sun Global Investments in London. He is “hopeful” that the government in power after the general election, which concludes in May, will continue the exemption from withholding for

The rupee has gained 5.2 per cent since the end of September against the dollar, making it Asia’s second best performer during that period. Measures to develop an offshore yield curve for would boost confidence among international for Indian assets, according to Marwaha.

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