The African International Financial Exchange (AFRINEX) is stepping up efforts to connect African companies with Indian investors as it seeks to expand cross-border capital flows between the two markets, AFRINEX CEO Thapelo Tsheole told DNE Africa.
The Mauritius-based international securities exchange is working with India INX, an international exchange based in Gujarat International Finance Tec-City (GIFT City), to develop a framework linking African and Indian capital markets.
Tsheole said the initiative will focus on creating investment products tailored to companies and investors on both sides, while increasing awareness among African issuers about opportunities to raise international capital.
India’s capital market has more than 200 million investors, according to Tsheole, creating a potentially significant pool of capital for African companies seeking to diversify their investor base.
AFRINEX plans to support the expansion through targeted roadshows, issuer education and awareness campaigns, alongside financial products designed to facilitate investment between the two markets.
The exchange is particularly looking at instruments such as Foreign Currency Convertible Bonds (FCCBs), structured products, depository receipts and exchange-traded funds, which could provide additional channels for Indian institutional investors and strategic investors to gain exposure to African businesses.
FCCBs Gain Traction
The growing use of Foreign Currency Convertible Bonds is also highlighting changing financing needs among companies seeking access to international capital, Tsheole said.
AFRINEX has attracted international issuers to list FCCBs, with its listing, clearing and settlement infrastructure and the broader advantages of the Mauritius International Financial Centre forming part of its value proposition, according to the CEO.
FCCBs combine debt financing with the possibility of conversion into equity, offering companies an alternative to conventional borrowing or immediate equity issuance.
Tsheole said the instruments can be particularly relevant for African companies seeking protection against local currency depreciation while accessing foreign capital.
“African companies increasingly require hedging against local currency depreciation and are looking for flexible hybrid instruments,” he said.
He added that FCCBs can allow companies to attract international capital while limiting immediate equity dilution and retaining the potential to strengthen their equity base through future conversion.
Positioning Mauritius as a Capital Gateway
AFRINEX was established as a Pan-African-focused international securities exchange through an initiative of the Government of Mauritius, with support from the Government of India and technology from the Bombay Stock Exchange.
Its Africa-India strategy forms part of a broader effort to use Mauritius’ international financial infrastructure to facilitate capital flows between Africa and global investment markets.
Tsheole said AFRINEX will continue developing products and partnerships aimed at bringing international investors closer to African businesses while giving companies across the continent greater access to diversified sources of capital.
