Which Indian state became the first in the country to list a masala bond in the overseas market to raise funds?

Introduction / Context:
Masala bonds are rupee denominated bonds issued outside India, allowing Indian issuers to raise funds from international markets while the currency risk is borne by investors. While initially used mainly by corporations and public sector entities, one Indian state government made news by becoming the first state to list a masala bond in an overseas market to finance its infrastructure projects.

Given Data / Assumptions:

- The question asks which state became the first in India to list a masala bond overseas. - The options are Karnataka, Odisha, Sikkim and Kerala. - We assume that the bond was issued by a state related financial vehicle on an international exchange. - The question is based on a specific current affairs event.

Concept / Approach:
Kerala attracted attention when the Kerala Infrastructure Investment Fund Board, a state level body, issued a masala bond on the London Stock Exchange to raise money for infrastructure development. This move made Kerala the first Indian state to tap the overseas masala bond market directly through a state backed entity. Exam oriented current affairs material therefore records Kerala as the first state to list such a bond overseas.

Step-by-Step Solution:
Step 1: Recall the news that a southern Indian state used masala bonds to finance large infrastructure projects through an investment fund. Step 2: Remember that this state was Kerala, acting through the Kerala Infrastructure Investment Fund Board. Step 3: Compare this with Karnataka and Odisha, which have undertaken various borrowing programmes but were not highlighted in the same way for masala bond listing firsts. Step 4: Recognise that Sikkim is a small state unlikely to be the first mover in this particular international bond market context. Step 5: Based on the widely reported event, select Kerala as the correct option.

Verification / Alternative check:
Financial newspapers and magazines reported on Kerala masala bond issue in detail, emphasising that it was the first time an Indian state government entity had listed such a bond on an overseas exchange. The London Stock Exchange also highlighted this listing as a milestone. Current affairs compilations summarised the story with the simple statement that Kerala was the first state to float a masala bond abroad, which is the statement this question is derived from.

Why Other Options Are Wrong:
Karnataka has a large economy and has used bonds for financing, but it is not recorded as the first state to list a masala bond overseas. Odisha has not been highlighted in major financial news as the pioneer in masala bond listings among Indian states. Sikkim is not associated with such an international bond issue in exam oriented GK material.

Common Pitfalls:
Because multiple states have announced innovative financing schemes, some candidates may guess Karnataka or another large state assuming that bigger economies always lead in such areas. Another source of confusion is the similarity between different types of bonds and loan instruments. To avoid errors, it helps to remember the specific pairing Kerala and masala bond listing on the London Stock Exchange as a unique fact.

Final Answer:
The first Indian state to list a masala bond in the overseas market was Kerala.