NTPC lists $6 billion medium term note on India INX at GIFT City
Ahmedabad: India’s largest power producer NTPC Ltd has listed its $6 billion (about Rs38,000 crore) medium term note (MTN) programme on India International Exchange (India INX) at International Financial Services Centre (IFSC) located at Gujarat International Finance Tec-City (GIFT City) in Gandhinagar.
NTPC became India’s first quasi-sovereign company to list at India INX, GIFT City Co. Ltd said in a media statement. The listing was done on 24 January, on the Global Securities Market of India INX, India’s first international exchange, it said.
GIFT City Co., which is implementing the GIFT City project in Gandhinagar, is an equal joint venture between Infrastructure Leasing and Financial Services Ltd and state government-owned Gujarat Urban Development Co. Ltd. Of the 880 acres allotted to GIFT City, about 250 acres is earmarked for the International Financial Services Centre (IFSC).
The listing will help NTPC raise funds at lower costs from international investors and also allow foreign investors to access good quality Indian debt paper.
“This is NTPC’s first listing at India International Exchange and we are very happy to be part of India INX at IFSC, GIFT City. Now, for the first time in India, we have the opportunity to reach out to international investors to raise funds using a wide variety of products and currencies, in a similar manner, as available in other international markets. We are excited with this new development and look forward to partnering with India INX in years to come,” Gurdeep Singh, chairman and managing director, NTPC Ltd said in the statement.
India INX was inaugurated by Prime Minister Narendra Modi in January 2017, setting forth a vision that the International Exchange at GIFT City should become a listing destination for issuers from India and the region. It claims to be one of the world’s most advanced technology platforms with a turn-around time of 4 micro seconds and operates for 22 hours a day to allow international investors and non-residents Indians to trade from anywhere in the world.
The exchange being located in IFSC, GIFT City provides competitive advantage in terms of tax structure and supportive regulatory framework. The Global Securities Market (GSM) of India INX went live on 8 December, 2017 with publication of its debt listing framework by India INX.
In a media statement issued on 25 January, V. Balasubramaniam, managing director and chief executive officer at India INX said that India’s IFSC mission suffers from several disadvantages which make it a less preferred option than New York, London, Singapore and Hong Kong.
On the expectations from the upcoming Union Budget, Balasubramaniam said that short term capital gains tax needs to be done away with for any transaction that is done through IFSC in both derivatives and debt.
“We have seen the impact of this already in the way in terms of the cost of doing a derivative transaction today at IFSC vs Singapore or London. We have also seen the impact of this in terms of volume erosion in India market once Dubai introduced single stock futures and now we are expecting Singapore to introduce them from February. The key reason why investors prefer to trade on Indian securities from global venues like London, Singapore and Dubai is because of less capital gains tax friction,” he said in the 25 January statement.
Among other things, he said that Long Term Capital Gains Tax should also be done away with for bonds traded at IFSC in the upcoming budget. This is a pre-requisite to develop a vibrant corporate bond market at IFSC, according to Balasubramaniam.
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