India’s largest power generating company, NTPC Limited, accessed the Masala bond market for the second time, pricing on April 25 a 2,000 crore rupees (US$312 million) offering, with the lowest yield ever achieved by an Indian issuer.

The Reg S five-year deal was priced at a coupon of 7.25% - or within AAA-rated corporate bonds of equivalent tenor in the domestic market.

The deal, according to NTPC, was oversubscribed with the participation of more than 40 accounts. In terms of geographical distribution, 83% of the bonds were allocated in Asia, 14% in Europe and 3% in offshore US. By type of investors, central banks and sovereign wealth funds accounted for 50% of the paper, asset and fund managers 30%, banks 14% and private banks 6%.

The transaction was the eight issuance under the company’s US$4 billion medium-term note programme since it was set up in 2006, taking the cumulative amount raised under the programme to US$3.46 billion. NTPC says it will use the bond proceeds to finance its ongoing and new power projects within India.

Axis Bank, Barclays, ICICI, MUFG and Standard Chartered acted as the joint bookrunners for the transaction.

Masala bonds are rupee-denominated offshore debt, with the principal and coupon payments on maturity being settled in US dollars at the prevailing rupee-US dollar exchange rate. NTPC is the only state-owned enterprise to tap the Masala bond market twice, having printed the first ever green Masala bond in August 2016 amounting to 20 billion rupees. The five-year deal had a coupon of 7.375% to offer a yield of 7.48%.

As the largest power generating company in India, NTPC accounts for about 15% of the country’s total installed power generation capacity and about a quarter of the electricity generation