Masala bonds could also be dual-listed in India, under options being explored by the London Stock Exchange Group and the National Stock Exchange of India. The idea being explored is a potential precursor of further joint listings in the future, that could see foreign currency bonds in India also being able to list in London.

46 Masala bonds have raised over $5 billion in London since they were first listed (including through dual listings elsewhere) but it is hoped the dual listing would extend access to a wider base of global investors as well as domestic and regional investors registered on the NSE’s International Exchange, NSE IFSC Limited in Gujarat International Finance Tech City. An MoU on the plans was signed by LSE Plc CEO Nikhil Rathi and NSE CEO Vikram Limaye on Friday.

“Dual listing of Masala bonds would enhance visibility, increase liquidity in secondary markets and enhance efficiency of price discovery for Masala bond issuers,” said Limaye. “This would also reduce the cost of raising capital for all issuers and encourage the participation of a wider variety of issuers in the Masala bond market.”

Masala bonds are rupee-denominated bonds issued by Indian institutions abroad to help fund infrastructure and other projects back home, and are a route for promoting foreign exchange inflow.

For now the talks on the joint listing remain exploratory, with no timeline set, but the LSE is also looking to launch ELITE, a business support and capital raising programme for high-growth SMEs in India in 2019, further extending a global programme already in place in 32 other markets.

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