Global Banks Boost India Bond Marketing As Index Day Nears

(Bloomberg) -- Wall Street banks are ramping up efforts to attract new business in India, as billions are set to flow into the country’s trillion-dollar sovereign debt market following the inclusion of nation’s bonds in global debt indexes. 

Morgan Stanley, Barclays Plc., Citigroup Inc. and Deutsche Bank AG are among institutions that have, or are in the process of engaging with global investors who could potentially invest large amounts of money in India, according to people familiar with the matter.

Barclays is hosting a roadshow with key India finance ministry and central bank officials in Mumbai and New Delhi this week, while Morgan Stanley is set to hold one in London, after having conducted a roadshow in Asia. Citibank has already held calls with global investors regarding operational procedures and is planning additional meetings, said the people, asking not to be identified because the matter is private.

This flurry of activity comes ahead of the addition of the nation’s sovereign bond market to JPMorgan Chase & Co’s global debt indexes from June, a move that may lure up to $40 billion of inflows. Foreigners own just above 2% of the government bonds, leaving ample room for more buyers. India’s bonds are held mostly by local investors and this marketing campaign by foreign banks reflects the nation’s weight in the index, which is at par with China.

Global funds have already begun to increase their holdings of index-eligible bonds since JPMorgan’s September announcement, adding 665 billion rupees ($8 billion) of holdings, data from the Clearing Corp. of India show.

Read more: Wall Street Pivots to India as It Searches for China Alternative

While many large foreign institutional investors have a presence in India, smaller funds are not registered. A targeted approach via calls, roadshows and one-on-one meetings is being used to lure first-time investors from financial hubs such as Hong Kong, London, Singapore, Dubai and New York, the people said.

Some investors have also previously pointed to a lengthy registration process and other operational hurdles around trading the country’s bonds. The outreach effort is aimed at making it easier for foreign investors to put their money to work in local bonds.   

Deutsche Bank and Barclays declined to comment on the story, while Morgan Stanley did not respond to an email seeking comment. 

Citigroup continues to actively engage with its global clients to showcase the India opportunity, Aditya Bagree, head of India markets, said in an e-mailed response. The bank held several roadshows across Japan, Australia, Europe, UK and the US last year, and will host its annual investor conference in March.

Bloomberg LP is the parent company of Bloomberg Index Services Ltd., which administers indexes that compete with those from other service providers.

(Updates with Citi response)

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