World Bank and its private lending arm International Finance Corporation are planning to float rupee-denominated bonds worth $100 million each when market conditions are 'favourable.'
Both the multilateral agencies have obtained all the clearances for the bonds, but the exact timing of the issue is yet to be decided, senior officials of World Bank and IFC said.
"We have plans to raise $100-150 million equivalent in rupee bonds. We will come up with the issue when the market condition is favourable," IFC South Asia director Dimitris Tsitsiragos said.
He indicated that the entire funds raised from the bonds might not be used for assistance to Indian companies.
World Bank's executive director C M Vasudev also confirmed the Bank has plans to raise $100 million equivalent from the Indian market.
The decision assumes importance in the wake of Asian Development Bank tapping the Indian markets for raising Rs 450 crore ($100 million) a few months ago.
Normally, the multilateral agencies raise funds from developed markets where interest rates are lower.
World Bank, for instance, extends commercial loans through its arm IBRD at Libor, while it provides concessional loans through another arm IDA.
The decision to raise rupee bonds came after the interest rates in India came down drastically by 5-6 per cent in the last five years.
The yield on 10-year government papers is now hovering at around 5.10 per cent.
While planning to raise funds from the Indian market, World Bank plans to double its exposure in the country at $3-4 billion annually from this fiscal, of which $2 billion may go into infrastructure projects.
IFC, on the other hand, intends to hike its exposure in Indian companies to 1.5 billion dollars in the next three years from the present $1.1 billion.
