What is India International Stock Exchange?

Today, on 9th January 2017, Prime Minister Narendra Modi inaugurated the India International Stock Exchange or India ISE in the Gift City, Gandhinagar, Gujarat.

India International stock exchange is basically a substitute for the banking activities done by Indian companies in offshore locations such a Singapore, Hongkong and Dubai. It is currently size at $48 billion and is projected to reach $120 billion in 7-8 years from now.

IISE will start operating from Jan 16, 2017 in the Equity segment. Other financial assets such as Commodity (Gold, Silver, Copper, Oil) and Currency will be in operations in few months time. It is backed up by BSE which is planning to invest ₹500 Crore into it.

As of now, if any Indian company wants to raise funds in foreign currency, then it needs to contact foreign exchanges such as London or Dubai or Hongkong every time. But now this procedure will become inexpensive and quicker. The domestic companies in India that want to go global will benefit from this move. IISE will operate for 22 hours a day starting when the Japanese markets start and closing when US markets close. This will allow international investors and non-resident Indians to trade from anywhere across the globe at any point in time.

It is majorly targeted at Institutional level hedging. Having said that, at the same time, it can be understood that competing with international markets such as Singapore or Hongkong is a long shot for now. However, it can be seen as a baby step towards keeping domestic investments within the country.

 

With India International Stock Exchange, Indian domestic companies will be able to raise capital in foreign currency. This can be done by issuing foreign currency dominated bonds and at the same time, to trade in such securities. IISE will be trading in all the financial assets like the other prominent exchanges in the world in equities, currency, commodities derivatives.

However, Derivatives products will not available at IISE since Indian regulations prohibit Indian individuals from speculating or doing derivatives trading in foreign markets as of now.

This is the moment of the inauguration:

*Video Source – Tv9 Gujarati

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