With the London Stock Exchange (LSE) being chosen by an increasing number of masala bond issuers, the UK government has shown interest in promoting the plans of both domestic and international institutions.
The LSE currently has 14 masala bonds listed on it, and their overall outstanding value is Rs.12,976 crore. In 2016, the LSE saw the listing of six such rupee-denominated bonds traded abroad issued by IFC, NTPC, HDFC, the European Bank of Reconstruction and Development, etc. Furthermore, the UK has offered to help in internationalising the Indian rupee.
Speaking on the matter to the PTI was Kumar Iyer, the British deputy high commissioner. “We are keen to promote further issuance of masala bonds. Britain is ready to help India internationalise the rupee and mobilise the rupee funds from foreign markets,” he said.
“We are ready to restructure our policies and regulations to achieve this objective,” he added before revealing that NTPC and HDFC, among others, were helped in lining up rupee bonds that have since completed during Prime Minister Narendra Modi’s visit to England in November last year.
“Anything that helps broader the objective of bringing capital to India, invest in India and create jobs is important to us,” added Iyer, stating that “this is needed as no single country or market can meet the growing capital requirement of a fast growing economy like India.”
The British government’s aim does not only revolve around bringing British capital to India, but to also import global capital for growth. Iyer also went on to quote a British minister who once stated that ‘Make in India, finance in the UK.’
Iyer added that an increasing number of investors are seeking access to rupee-denominated assets as much as they seek their dollar or pound-denominated counterparts, and as a result, the UK is working in tandem with commerce and finance ministries in New Delhi to promote masala bonds.
Iyer closed the interaction by revealing that “Britain’s exit from the EU gives us scope to build closer ties, to have bilateral trade agreements, and we hope to take advantage of it.”