The exchange controls about 90 per cent of the currency markets at the IFSC, which is based in Ahmedabad. Another player in the same segment at GIFT is NSE IFSC.
At present, participants are IFSC brokers and their foreign clients, such as NRIs, eligible foreign investors and FPIs. “Banks are getting on-boarded and we expect volumes to go up significantly,” said Balasubramaniam.
India INX is also bringing part of the external commercial loans (ECB) to India. According to Balasubramaniam, the exchange has already established medium-term note (MTN) programmes worth more than $48 billion and bonds listings of over $21 billion. Earlier, these bonds used to get listed at the LSE and Singapore Exchange.
“Even during the Covid-19 period, bonds worth $600 million were listed on the Global Securities Market (GSM) platform of India INX. These were SBI Green Bonds worth $100 million and REC bonds worth $500 million. In February this year, we had Rs 850-crore masala bonds listed by the Asian Development Bank, which is a supranational company,” he said.
In the India INX exchange, bonds have been listed by firms like IRFC, PFC, EXIM, Adani Group, ONGC, etc. This is partly because the withholding tax on bonds listed in IFSC is 4 per cent, against 5 per cent on those listed on onshore exchanges, according to the latest amendment in Finance
Now the exchange hopes that it can become a major centre in NDF as well, as 13 banks have started their operations in IFSC to trade in NDF. However, the Covid-19 pandemic has acted as a speed breaker.
“India INX is operational for 22 hours whereas the other exchange in GIFT IFSC is operational for 15 hours and 30 min. DGCX is operational for nearly 17 hours and SGX around 21 hours,” said the CEO.
The exchange wants to use this continuous trading hours in currency as its selling point, he said.
The exchange is also working to start Global Depository Receipt services and expects Indian companies to raise equity from IFSC.
Already, Index 50 contract is traded on India INX and the volume is already about half of SGX-Nifty. Similarly, gold volumes on India INX are higher than DGCX Gold volumes, he said.