India's Dewan Housing celebrates USD 150mn London Masala Bond listing
The five-year bond has an annual yield of 8.5 per cent and DHFL plans to use the proceeds of the offshore rupee-denominated bond to implement its "ambitious growth strategy", through portfolio diversification and strengthen profitability through reduction in its cost of borrowing. "This is truly a significant milestone for DHFL making a debut listing in the international markets," said Kapil Wadhawan, chairman and managing director of DHFL, a company with a focus on providing financing products for the low and medium income (LMI) segment in India.
India's Dewan Housing Finance Limited (DHFL) today celebrated its first Masala Bond on the London Stock Exchange with a market opening ceremony. The deposit-taking housing finance business raised USD 150 million as part of the listing on the London Stock Exchange's International Securities Markets (ISM) last month, receiving strong international investor interest across Europe and Asia. The five-year bond has an annual yield of 8.5 per cent and DHFL plans to use the proceeds of the offshore rupee-denominated bond to implement its "ambitious growth strategy", through portfolio diversification and strengthen profitability through reduction in its cost of borrowing. "This is truly a significant milestone for DHFL making a debut listing in the international markets," said Kapil Wadhawan, chairman and managing director of DHFL, a company with a focus on providing financing products for the low and medium income (LMI) segment in India.
Wadhawan pointed out that India's mortgage-to-GDP ratio has been improving compared with other developing countries, reflecting major penetration and sustainable and inclusive growth. He praised the Indian government's several strong initiatives to stimulate the affordable housing industry and focus on people at the bottom of the pyramid. "This has been DHFL's vision for the last 34 years, which has today assumed national priority through the government's Housing for All mission. DHFL's Masala bonds issuance will provide further impetus to our ambitious growth strategy, and allow international investors to participate in India's high potential affordable housing story," he noted.
The ISM has been designed to meet the demands of issuers and investors to improve the effectiveness and competitiveness of the UK primary debt markets, providing greater choice for a variety of fixed income issuers.
Nikhil Rathi, CEO, London Stock Exchange, said: "Through this market, the company is accessing a new deep international pool of capital to finance affordable housing in India. "The successful admission is also a reflection of international investors' interest in the Indian growth story and it highlights London Stock Exchange's position as a strong partner to India and a leading global venue for raising equity and debt finance."
The DHFL listing marks the first Indian non-quasi sovereign corporate to issue a five-year Masala Bond and takes the total of Masala Bonds currently listed on London Stock Exchange to 26. "We believe the bonds are an attractive opportunity for international investors to get access to a quality Indian credit," said Mihir Kapadia, the CEO of Sun Global Investments, a London-based emerging markets specialist boutique investment bank which acted as Joint Lead Managers for the issuance, along with Barclays Bank, UBS and Yes Bank.
Mark Field, UK's Minister of State for Asia and the Pacific at the Foreign & Commonwealth Office, said: "Indian ambition and British expertise are combining in exciting projects in infrastructure, technology, innovation and clean energy sectors, creating growth and jobs in both countries. "London is well-known as the world's financial centre and I am pleased we continue to lead the way in international listings of Indian rupee or Masala Bonds."
Dinesh Patnaik, Deputy High Commissioner of India to the UK, noted that the London Stock Exchange has become the preferred location for raising finance, specially through Masala Bonds by many Indian companies. "We have in the last few years raised around USD 5 billion through this source of funding. It is heartening to note that not only public sector undertakings from India but also many private sector firms are using this route to raise finance," he said.
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A Masala Bond is a rupee-denominated bond issued to overseas investors. The bonds are settled in US Dollars and are typically subject to English law.