InvestorQ : What is the significance of ADB listing its Masala Bonds in India?
NISHA Nayak made post

What is the significance of ADB listing its Masala Bonds in India?

Answer
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sara Kunju answered.
8 months ago


The Masala Bond is an Indian rupee bond that is issued abroad. Since the bond is denominated in rupees, there is no currency risk and the currency risk taken on by the person who buys the bond and not by the seller of the bond as is the normal case.

Masala Bonds became popular product in between but then there have been issues of malpractices that were reported after which the regulations became tougher and companies are now less inclined towards these Masala Bonds.


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Mitali Bhutta answered.
8 months ago


This is the first instance of an internationally reputed agency raising money in Masala bonds and then listing it on the INX exchange in India. Masala bonds are rupee denominated bonds that are raised in a foreign market. In fact, Asian Development Bank (ADB) has listed its 10-year Masala Bonds worth Rs.850 crore on the INX. India INX is the debt listing platform provided by India. The advantage of these bonds is that they save the current risk. These Masala bonds will be listed simultaneously on the Indian INX and also on the Luxembourg Stock Exchange. This is an important move as it is the first that a reputed foreign entity is listing its bonds on the INX. This is part of the International GIFT City, which was created to compete with global financial markets and prevent the export of trading to foreign countries as was happening in the case of SGX and Dubai exchanges.