Kerala became first state to list Masala Bond in overseas market


Kerala became the first state to tap into masala bond market by listing the Kerala Infrastructure Investment Fund Board (KIIFB)’s masala bond worth of USD 312 million (Rs 2,150 crore) in London Stock Exchange (LSE)’s International Securities Market (ISM). The masala bond has tenor of 5-year and a 9.723% coupon.

  • Kerala government has opened trading on the London Stock Exchange by ringing the iconic bell.
  • The state-owned Kerala Infrastructure Investment Fund Board (KIIFB) started its ‘masala bond’ issue of Rs 2,150 crore on the bourse.
  • The idea of masala bonds was reportedly put forward by state finance minister Thomas Issac in order to raise funds to rebuild infrastructure in the state which recently saw devastating floods.
  • The bond is guaranteed by the Kerala government.
  • After the bond issue debut, Kerala Infrastructure Investment Fund Board became the first sub-sovereign entity in India to tap the offshore rupee international bond market.
  • The secured fixed-rate bond, with a five-year tenor and a 9.723 percent coupon, has been admitted to London Stock Exchange’s International Securities Market (ISM).


  • Masala bonds are the Rupee denominated bonds, which can only be issued in a country and subscribed by a resident of such country that is a member of the financial action task force (FATF) and whose securities market regulator is a member of International Organization of Securities Commission.
  • While residents of such countries can subscribe to the bonds, it can also be subscribed by regional and multilateral financial institutions where India is a member nation.
  • The minimum maturity period for such bonds raised up to Rupee equivalent of USD 50 million in a financial year should be 3 years and for bonds raised above, USD 50 million equivalents in INR per financial year should be 5 years.
  • The issuance of masala bonds was first allowed by Reserve Bank of India in 2015.