Bond Masala Sukuk Islamic INR India Market 2026
The Bond Masala Sukuk market, particularly in India, is poised for significant growth as the demand for Sharia-compliant investment opportunities increases. As of 2023, the global Islamic finance market stood at approximately USD 3 trillion, with Sukuk issuance reaching USD 200 billion. The Indian market, specifically, is witnessing a surge in infrastructure projects needing funding, leading to increased interest in Masala Sukuk due to its favorable exchange rate risk profile and compliance with Islamic law. By 2026, the market is expected to expand significantly, driven by investor appetite and regulatory support.
1. Government of India
The Government of India has been a prominent issuer of Masala Bonds, raising around INR 7,000 crore (approximately USD 940 million) in 2020 alone. The government’s focus on infrastructure development and sustainable financing is expected to drive further Sukuk issuance.
2. National Highways Authority of India (NHAI)
NHAI has issued Masala Bonds worth INR 2,500 crore to finance road projects. The agency’s continued investment in infrastructure is likely to enhance its funding through Sukuk.
3. State Bank of India (SBI)
SBI issued its first Masala Bond in 2016, raising USD 650 million. As the largest public sector bank in India, SBI’s commitment to Islamic finance is expected to strengthen its portfolio with Sukuk offerings.
4. Tata Group
Tata Group is exploring Sukuk issuance to fund its diverse business ventures, including renewable energy. The Tata brand’s strong reputation positions it favorably in attracting Islamic investors.
5. ICICI Bank
ICICI Bank issued Masala Bonds worth INR 3,000 crore in 2021, showcasing the bank’s commitment to broadening its funding sources with Sharia-compliant instruments.
6. Axis Bank
Axis Bank has considered issuing Masala Bonds to support its infrastructure lending. The bank’s strategy to tap into Islamic finance reflects its growth-oriented approach.
7. HDFC Bank
HDFC Bank has shown interest in the Masala Sukuk segment, with plans to issue bonds that cater to Islamic investors seeking diversified portfolios.
8. Adani Group
The Adani Group is evaluating Sukuk issuances to fund its extensive infrastructure and renewable energy projects, potentially raising billions in capital through Sharia-compliant routes.
9. Larsen & Toubro (L&T)
L&T has raised significant capital through Masala Bonds, with INR 1,000 crore issued recently. The company’s ongoing projects in infrastructure make it a key player in the Sukuk market.
10. Yes Bank
Yes Bank has participated in Masala Bond offerings and aims to expand its footprint in Islamic finance, targeting a growing segment of investors looking for ethical investment options.
11. Government of Maharashtra
The Maharashtra Government issued INR 500 crore in Masala Bonds to finance urban development projects, reflecting the state’s commitment to sustainable infrastructure funding.
12. Punjab National Bank (PNB)
PNB has explored Masala Bonds to diversify its funding base, aligning with the growing trend of Islamic finance in India.
13. Indian Railway Finance Corporation (IRFC)
IRFC has raised funds through Masala Bonds to support railway infrastructure improvements, emphasizing the role of Sukuk in financing public sector projects.
14. GMR Group
GMR Group is looking into Sukuk issuance as part of its funding strategy for airport and infrastructure developments, tapping into the Islamic investor base.
15. Kotak Mahindra Bank
Kotak Mahindra Bank is evaluating opportunities in Masala Bonds to enhance its capital structure while complying with Islamic finance principles.
16. NTPC Limited
NTPC issued INR 1,000 crore in Masala Bonds to fund renewable energy projects, indicating the potential for Sukuk in financing green initiatives in India.
17. Indian Oil Corporation (IOC)
IOC has considered Masala Bonds for financing its expansion plans, showcasing the versatility of Sukuk in various sectors, including energy.
18. Hindustan Aeronautics Limited (HAL)
HAL is exploring Sukuk to fund its aerospace projects, reflecting the growing acceptance of Islamic finance within India’s defense sector.
19. JSW Steel
JSW Steel has shown interest in Masala Sukuk for financing its expansion and modernization projects, indicating a robust pipeline for Sukuk issuance.
20. Reliance Industries Limited
Reliance Industries is likely to enter the Masala Sukuk market to raise capital for its diverse business ventures, including telecom and retail, appealing to ethical investors.
Insights
The Indian Bond Masala Sukuk market is projected to grow at a CAGR of approximately 15% through 2026, driven by increasing demand for Sharia-compliant investment vehicles and sustainable financing options. With Sukuk issuances expected to reach INR 50,000 crore by 2026, the market’s expansion will be supported by the government’s infrastructure development plans and the rising awareness of ethical investments among Indian investors. The increasing collaboration between public and private sectors in Sukuk offerings will further bolster market growth, ensuring that India remains a key player in the global Islamic finance landscape.
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