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The National Stock Exchange has signed a pact with the London Stock Exchange Group (LSEG) to work on a dual listing route for masala bonds as well as foreign currency bonds of Indian issuers.
NSE said in a statement that both have also agreed to explore the launch of ELITE -- LSEG’s business support and capital raising initiative for small and medium enterprises -- in India in 2019. The Memorandum of Understanding was signed by NSE MD and CEO Vikram Limaye and London Stock Exchange Plc CEO Nikhil Rathi.
Under the pact, LSEG and NSE will together look to provide a route for masala bonds (rupee-denominated bonds) and foreign currency bonds of Indian issuers listed on the London Stock Exchange to be dual listed on NSE’s International Exchange, NSE IFSC Ltd, at Gujarat International Finance Tech (GIFT) city.
Similarly, masala bonds and foreign currency bonds of Indian issuers listed on NSE IFSC at GIFT City will be dual listed on the London Stock Exchange.
“Through the approval of a single listing document, an issuer will be able to obtain a dual listing on the London Stock Exchange’s International Securities Market and GIFT City, gaining access to an enhanced investor base of global institutions based in London, as well as domestic and regional investors registered on NSE IFSC,” NSE said.
Limaye said, “Dual listing of masala bonds and foreign currency bonds of Indian issuers would enhance visibility, increase liquidity in secondary markets and enhance the efficiency of price discovery for the bond issuers.
“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,” he added.
The pact also outlines the parties’ commitment to engage with growing companies, leading financial institutions and the broader SME community across the country to integrate them with the global ELITE community.
The ELITE global community is made up of over 900 private, ambitious companies from 32 countries and over 30 sectors. “ELITE will bring a more in-depth and formalised process to help SMEs scale up their businesses and integrate them with the global ELITE community,” Limaye added.
According to Rathi, “The MoU signing demonstrates LSEG’s and NSE’s commitment to promoting the inter-connectedness between the UK and Indian capital markets, supporting global awareness of the opportunities that exist in India’s first international financial services centre, GIFT City, and championing the development of the country’s SMEs.’’
It also underlines the strength of the economic and financial partnership between the UK and India, reinforcing London’s position as a complimentary and valued funding partner to India, he added.
Last week, the government had announced the removal of withholding tax on masala bonds and other measures to check the rupee fall.
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