The International Finance Corporation (IFC) on Friday successfully issued seven-year bonds totalling Rs 12 billion (about $ 194 million), bringing the total amount raised under its first global rupee bond programme to $ 1 billion.

Considered one of the steps towards internationalisation of Indian currency, the programme was launched to strengthen India’s capital markets and attract greater foreign investment.

The seven-year IFC bond offering is the longest-dated issue to date in the offshore rupee markets.

It was oversubscribed by 140 per cent, the IFC said.

Noting that most of the investors were from outside Asia, the IFC, a member of the World Bank, said the bond yields 8.25 per cent return.

Under its global rupee bond programme, IFC has also issued three-year bonds totalling Rs 30 billion and five-year bonds totalling Rs 20 billion.

“The very strong market response to IFC’s first global rupee bond programme highlights the growing confidence of international investors in India’s economy,” IFC EVP and CEO Jin-Yong Cai said in a statement.

“By offering a range of tenors under the programme, we were able to attract a broad range of investors from around the world, bringing depth and diversity to the offshore rupee market,” he added.

Economic Affairs Secretary, Arvind Mayaram, said with the global rupee bond programme, IFC made an important contribution to the development of India’s capital markets, attracting foreign investment at this important juncture.

This also established an Indian rupee benchmark in the global markets, he said.

Under its global rupee bond programme, IFC had also issued three-year bonds totalling Rs 3,000 crore, and five-year bonds totalling Rs 2,000 crore.

IFC global rupee bonds are denominated in rupee but settled in US dollars, with all principal and coupon payments tied to the dollar-rupee exchange rate. IFC converts bond proceeds from dollars into rupees on the domestic spot exchange market, and invests in the country.

Over the years, IFC has issued bonds in 14 emerging market currencies, including the Brazilian Real, the Chinese Renminbi, the Nigerian Naira, and the Russian Rouble.

India has been getting the highest amount of investment funding from IFC which as of June 30, 2013 stood at $ 4.5 billion. In FY13, IFC had invested $ 1.38 billion in the country to promote inclusive growth in low-income states, addressing climate change issues, and supporting global economic integration.