Indian government bonds got another boost on Tuesday with Bloomberg announcing their inclusion in its Emerging Market (EM) Local Currency Government Index and related indices from January 31 2025.

The inclusion is expected to bring inflows of at least $5 billion into domestic government securities.

Last year, index provider JP Morgan announced that it would include Indian government bonds in its emerging market index.

Analysts have estimated the Morgan entry alone could potentially lead to inflows of up to $25 billion into India’s debt market.

Bloomberg on Tuesday said that Indian Fully Accessible Route (FAR) bonds that are exempt from investment ceilings will be included in Bloomberg EM Local Currency Government indices with an initial weight of 10 per cent of their full market value on January 31, 2025.

The weight of FAR bonds will be increased in increments of 10 per cent of their full market value every month over the 10 months ending October 2025.

Bloomberg will introduce government bonds for inclusion in the Bloomberg EM Local Currency Government Index, the Bloomberg EM Local Currency Government Index 10 per cent Country Capped Index and all related sub-indices.

Once completely phased into the Bloomberg Emerging Market 10-cent Country Capped index, India is expected to join both China and South Korea as markets that have reached the 10 per cent cap.

“This is an important marker in the development of India’s financial markets and a reflection of India’s growing importance to the global economy,” Bloomberg LP founder Michael R Bloomberg said.

Adani bonds

The Adani group saw massive demand on Monday for its first dollar bond issue since the Hindenburg report last year, in what two banking sources said was being seen internally as a test for the conglomerate’s access to global capital markets.

Adani Green Energy priced a $409 million 18-year bond after receiving nearly $3 billion of demand for it, said the sources, who have direct knowledge of the deal.

The issuer received bids from 163 investors, of which, 45 per cent were from Asia, 24 per cent from the United States, 21 per cent from Europe and the rest from West Asia.

Analysts at CreditSights had noted that the bonds were likely to generate strong demand given the lack of high-yield paper in the Asian US dollar bond market and
the enthusiasm for Indian renewable infrastructure credit.

Adani Green’s bonds will pay a yield of 6.7 per cent, 42.5 basis points cheaper than levels initially proposed, thanks to the strong demand.

With inputs from Reuters