Masala bonds: 5 things to know

1. Masala bonds are bonds issued by Indian companies in foreign countries, but are denominated in Indian rupees.

2. The payment for coupon and principal is made in rupees, not in the currency of the foreign investors. Hence, the currency risk is borne by the investor.

3. Indian companies can raise money at lower interest rates compared to India as interest rates in developed markets are generally lower.


4. They provide a pathway for international investors to explore investment opportunities in Indian companies.

5. Masala bonds can be privately placed or listed on exchanges.

Content on this page is courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.