The World Bank's private-sector financing arm on Wednesday launched $2.5 billion, rupee-denominated, bonds in the Indian market to fund infrastructure projects, after raising $1 billion in offshore bonds for the sector last year.
The International Finance Corporation's (IFC's) bond programme comes at a time when both the Indian government and the central bank are stepping up measures to attract global investors to deepen the local bond market.
"Bonds offered under IFC's rupee financing programme offer a safe investment alternative for domestic pension funds and other investors, while mobilising capital to address India's infrastructure needs," said Jin-Yong Cai, IFC Executive Vice President and CEO, in a statement.
Under the programme, IFC will use a combination of rupee-denominated bonds and swaps to raise local-currency financing of up to $2.5 billion, or 150 billion rupees, over the next five years.
IFC's mandate includes the development of local capital markets across the world, and the multilateral body remains committed to play a role in India's onshore market.
Last year, IFC issued a $1 billion offshore global rupee-linked bond, to fund infrastructure projects, that attracted a broad range of international investors.
"Issuance of onshore bonds by IFC in the Indian bond market, with offer of longer-tenor bonds, will deepen the bond market," Finance Secretary Arvind Mayaram said.
IFC invested $1.2 billion in India during the 2013/14 fiscal year that ended in March.
As of end June 2014, the IFC's India portfolio contained 239 projects, amounting to committed and disbursed exposure of $5.3 billion.
(US$ 1= 60.6600 Indian rupees)