HDFC Current Affairs - 2019

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HDFC becomes first Indian Company to issue masala bonds

The Housing Development Finance Corporation (HDFC) has become the first Indian company to issue rupee-denominated bonds “masala bonds” on London Stock Exchange (LSE).

The bond will help HDFC, India’s biggest mortgage lender (home finance company) to diversify its borrowing profile and access global investors.

With this issuance of masala bonds, HDFC is planning to raise 750 million dollars from the overseas market during the current financial year.

Background

  • Earlier in September 2015, the Reserve Bank of India (RBI) had allowed companies to raise rupee-denominated bonds in order to reduce the risk of borrowing in foreign currencies.
  • Since then Private and public sector companies have lined up plans to issue masala bonds. State-owned NTPC, Indian Railway Finance Corporation (IRFC) and India Infrastructure Finance Company (IFC) also have planned to raise funds through masala bonds.

What are masala bonds?

  • The Masala bond refers to a rupee-denominated bond through which Indian entities can raise money from foreign markets in rupee, and not in foreign currency.
  • Basically, bonds are instruments of debt that are typically used by corporates to raise money from investors.
  • By issuing bonds in rupees, an Indian entity is protected against the risk of currency fluctuation, typically associated with borrowing in foreign currency.
  • Masala bonds also help in internationalization of the rupee and in expansion of the Indian bond markets. These bonds are usually traded on the LSE and not in India.

India’s 10 companies in Forbes Asia Fabulous 50 list

Forbes Asia Fabulous 50 list released on the eve of its 10th Anniversary has listed 10 Indian companies which stands second after China in terms of number of companies listed.

This year’s list was also dominated by Chinese companies, over 25 Chinese companies made to the list against 16 last year.

China’s Tencent continued to be at the top on chart, which now worth $ 176.5 bn. South Korea has third highest number of companies with four firms after China and India, whereas Malaysia, Singapore, and Philippines have two firms each and Japan, Indonesia have one firm each on the list.

Indian companies that made to the list are: HDFC Bank, Tata Consultancy Services, HCL Technologies, Aurobindo Pharma, Lupin, Sun Pharma Industries, Motherson Sumi Systems, Tech Mahindra, Tata Motors and Titan.

Among the fifty companies HDFC Bank was named as Asia Fab 50’s “brightest star” as it has made to the list nine times that is more than any other company in the list.

Note: Forbes selects The ‘Fab 50’ companies from the pool of 1,116 firms that have at least $ 3 billion in annual revenue or market cap.