KIIFB’s masala bonds to hit market next month

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RBI has given nod for raising ₹2,700 crore

The Kerala Infrastructure Investment Fund Board (KIIFB) is gearing up to float its masala bonds in March, thereby announcing its arrival in the international market.

A major Canadian pension fund and a slew of reputed investors, including those based in Singapore and London, have evinced interest in making substantial investments in the board’s projects.

Registering a presence in the international financial circuit is expected to help this ‘controlled leverage off-budget mechanism’ pass the initial test in terms of proving financial robustness.

Promotional drive

The Reserve Bank of India has given the nod for raising ₹2,700 crore. The promotional drive of the board has received encouraging response from potential investors, says Chief Executive Officer K.M. Abraham.

“Much more than the quantum of funds to be mobilised, the acceptability the board would gain in the international market is what is significant. This would give more room for raising dollar offerings,” Mr. Abraham said.

Positive response

A positive response from the international market to the bonds would give a clear message that the board has built up the resilience to stick to prudential regulatory norms and that would enhance its fiduciary value among investors. Most of the international investors come forward for long-term investments than one-off deals and this initiative is expected to be a major leap for the board.

The board’s investment plans span across sectors ranging from micro-level projects to construction of university buildings, development of sports, power, industries and health infrastructure and is set to branch out into new domains.

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