These 'Masala bonds', at 6.3 percent yield and issued on Monday under IFC's USD 2 billion offshore rupee programme, are the first rupee bonds to be listed on the London Stock Exchange, IFC said in a statement.

"IFC issued the bonds in London to leverage the city's standing as a premier financial centre. The vast majority of investors are European insurance companies," it said.

Proceeds from the offering will support a forthcoming infrastructure bond issue by Axis Bank, the statement added.

These are the longest-dated bonds in the offshore rupee markets, building on earlier offshore rupee issuances by IFC at three, five, and seven-year maturities.

"The IFC Masala bonds set a triple-A benchmark for offshore rupee issuances and pave the way for more foreign investment to help meet India's private sector development needs," said Tarun Bajaj, joint secretary, Department of Economic Affairs.

"International investors see value in the rupee. With the Modi government's determination to increase infrastructure finance, the timing is perfect for India to attract institutional investment", said Hua Jingdong, vice-president, IFC.

India needs financing to the tune of USD 1.5 trillion in the next five years for infrastructure development.

Masala bonds are akin to IFC's 'dim sum' Chinese offshore issues. Bonds issued in India are known as Maharaja bonds.

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