Masala Bonds? Here's everything you need to know

Masala Bonds, the term itself might look unfamiliar for many. But it's not unfamiliar for people who deal with the bonds.

Masala bonds

are bonds issued outside India by an Indian entity or corporate. These bonds are issued in Indian currency than local currency.


Indian corporates usually issue Masala Bonds to raise funds from foreign investors. As it is pegged into Indian currency, if the rupee rates fall, investors bear the risk.

What is Masala Bond?
The International Finance Corporation (IFC) named it Masala Bond, which is an Indian word for spices, to stimulate the culture and cuisine of India on the international platform. The first Masala bond was issued in 2014 by IFC for the infrastructure projects in India.

How does Masala Bonds help bond issuer?

As Masala bonds are issued directly in Indian rupees, the investor needs to bear the exchange rate risks. Rupee rate falls will not affect the issuer of Masala Bonds. In simpler words, as Masala Bonds are rupee-denominated bonds, the risk goes directly to the investor.

Who is eligible to invest in Masala bonds?

Investors from outside of India who would like to invest in Indian assets can invest in Masala bonds. Indian entities like HDFC, NTPC and Indiabulls Housing have raised funds via Masala Bonds.


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