Bank of Baroda’s underwriting of a USD 500 million, five-year foreign currency term loan for OVL Overseas IFSC Limited (OOIL) is more than a large-ticket financing transaction—it is a strong validation of GIFT City’s growing role as India’s offshore financial nerve centre for PSUs with global ambitions.
Acting as the Sole Mandated Lead Arranger, Bank of Baroda has extended the facility through its IFSC Banking Unit (IBU) in GIFT City to OOIL, a wholly owned subsidiary of ONGC Videsh Limited (OVL). The structure allows OVL to centralise treasury operations, optimise borrowing costs, and raise global capital from an Indian jurisdiction that increasingly mirrors international financial centres.
A Strategic Shift in PSU Global Fundraising
Traditionally, overseas funding for Indian PSUs—particularly energy majors like ONGC Videsh—has been routed through foreign banks, offshore branches, or international financial centres such as Singapore and London. This transaction marks a subtle but important shift: Indian banks are now underwriting large foreign currency exposures from within India’s own offshore ecosystem.
For ONGC Videsh, which operates assets across Russia, Africa, Latin America and West Asia, the establishment of OOIL as a treasury hub in GIFT City enables better cash pooling, risk management and funding agility, critical for a company navigating volatile global energy markets.
Bank of Baroda Strengthens Its International Play
For Bank of Baroda, the deal reinforces its credentials as a serious player in syndicated foreign currency lending, particularly for PSU-led international projects. Its IFSC Banking Unit—now the Bank’s third-largest branch outside India—has emerged as a key platform for cross-border credit, trade finance and structured deals.
By underwriting the entire USD 500 million facility, Bank of Baroda has signalled confidence not only in ONGC Videsh’s balance sheet but also in GIFT City’s regulatory stability, liquidity depth and execution capability.
GIFT City Gains Credibility as an Offshore Hub
The transaction also adds weight to the government’s long-standing ambition of positioning GIFT City as a viable alternative to established offshore centres. Large-ticket PSU financing deals conducted from GIFT City help create scale, deepen liquidity, and encourage other PSUs and corporates to migrate treasury and financing operations to the IFSC.
Importantly, such deals reduce India’s dependence on overseas jurisdictions for strategic financing while keeping regulatory oversight and value creation closer home.
The Bigger Message
At a time when Indian PSUs are expanding their global footprint—whether in energy, minerals or infrastructure—the ability to raise competitive foreign currency funding from an Indian offshore centre, backed by Indian banks, marks a structural shift.
Bank of Baroda’s USD 500 million underwriting for ONGC Videsh is therefore not just a financing milestone—it is a signal that India’s PSU ecosystem, banking sector and GIFT City infrastructure are finally converging at scale.
