On Wednesday 1 June 2022, in a ceremony held in the Gujarat International Finance Tec (GIFT) City, India, the Luxembourg Stock Exchange (LuxSE) and the India International Exchange (IFSC) Limited (India INX) signed a cooperation agreement through which the two exchanges will enhance the visibility of listed Indian securities towards international investors by facilitating admission of such securities on LuxSE.
The agreement builds on the Memorandum of Understanding (MoU) signed by the two institutions in November 2020, which placed a specific focus on advancing green finance in India. The announcement on Wednesday marks the next important step undertaken by the two international exchanges to bridge the gap between India and international capital markets and strengthen cross-border cooperation in sustainable finance.
During the ceremony, the parties announced the admission on LuxSE of a green bond issued by the Indian company Power Finance Corporation. The €300 million green bond, which is already listed on India INX, is now registered on LuxSE’s Securities Official List and displayed on the Luxembourg Green Exchange (LGX), the world’s leading platform for sustainable securities.
Speaking at the event, Mr Injeti Srinivas, Chairman of the International Financial Services Centres Authority (IFSCA), India’s financial regulator, said: “The signing of this cooperation agreement between India INX and LuxSE is another step towards developing IFSC as the hub for sustainable finance. It is expected that strong cooperation between the two exchanges will increase the investor base for the issuers listed on India INX by enhancing the visibility of such securities to international investors.”
Bringing Indian securities to international investors
LuxSE is the world’s leading exchange for the listing of international debt securities serving 2,000 issuers from 100 different countries. It established LGX in 2016 to advance the sustainable finance agenda and has since been recognised by the United Nations for its contribution to accelerating climate friendly investment. LGX currently encompasses 1,300 green, social, sustainability and sustainability-linked bonds raising a total of €727 billion for specific green and social projects and sustainable development across the world.
“This cooperation agreement with India INX is an important milestone for LuxSE and reflects our willingness to strengthen cross-border collaboration in international capital markets and to help reorient capital flows towards sustainable development. Through this cooperation, Indian issuers can benefit from wider, international visibility and increase their exposure to the international investment community. We are pleased to welcome on our exchange today a new green bond from an Indian issuer, and hope other Indian issuers will follow suit,” said LuxSE’s Director of International Capital Markets and Member of the Executive Committee, Mr Arnaud Delestienne.
India INX is a subsidiary of the Bombay Stock Exchange and is India’s first international exchange founded in January 2017. In the five years since its official launch, India INX has taken important steps to support India’s economic growth by capitalising on international capital markets and has created the country’s first international primary market platform connecting global investors with Indian and foreign issuers, its Global Securities Market (GSM).
Commenting on the development, Mr Venkataramani Balasubramaniam, MD & CEO of India INX said: “The green corridor opportunity established with this dual listing cooperation agreement between India INX and LuxSE will go a long way in attracting more issuers from India and the region and provides access to green capital from international investors. We are delighted that Power Finance Corporation has dual listed its EUR 300 million green bond through this arrangement.”
Green bond from India to Luxembourg
The signing ceremony took place in the presence of Luxembourg Ambassador to India, Peggy Frantzen, which included the admission on LuxSE of a green bond from Power Finance Corporation Limited. This bond serves as an illustration on the cooperation agreement facilitating dual listing of a security in India and Luxembourg.
Established in 1986 and headquartered in New Delhi, Power Finance Corporation is an infrastructure finance company under the administrative control of the Indian Ministry of Power. Its green bond has a seven-year maturity and secures funding for renewable energy projects in India such as onshore generation facilities for both solar electricity and wind energy. This green bond follows the admission on LuxSE of State Bank of India’s $650 million green bond in November 2021.