What is masala bond?

 A masala bond is a type of rupee-denominated bond issued by an Indian entity and listed on an international stock exchange outside of India. The bond's coupon and principal are payable in rupees, while the bond itself is denominated in another currency, typically the US dollar. The purpose of issuing masala bonds is to raise funds from international markets and to take advantage of lower borrowing costs in the global market. Masala bonds provide Indian companies with access to a new source of capital, allowing them to diversify their funding sources and reduce their dependence on domestic markets. The term "masala" refers to the Indian spice mixture and symbolizes the flavor and excitement of the Indian economy.