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India’s first inflation-linked securities index launched

CRISIL Research, India’s largest independent and integrated research house, today announced the launch of Inflation Indexed Government Securities Index (CRISIL IIGS Index), a first for the Indian bond market.

CRISIL IIGS Index seeks to track the performance of a portfolio of inflation-linked securities issued by the Government of India. CRISIL believes the index will provide market participants an appropriate and easily accessible benchmark to measure and analyse the performance of such securities.

A Total Return Index, the CRISIL IIGS Index seeks to capture returns on inflation-linked securities due to coupon accruals and price change, both adjusted for inflation. Currently, there is one such security, the 1.44% Inflation Indexed Government Stock 2023 (linked to Wholesale Price Index) issued in June 2013. Such securities provide inflation protection on both principal and coupon (interest) payments. CRISIL already provides daily valuation of such securities to investors including mutual funds for determination of Net Asset Value of funds.

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Sandeep Sabharwal, Senior Director, Capital Market, said, “Since its launch in 2013, the inflation-linked government security has gained some popularity in the mutual funds space. Two inflation-linked funds have already been launched and a few are in the pipeline. We believe the CRISIL IIGS Index will meet the need for an appropriate benchmark index for these funds.”

The launch comes as part of CRISIL’s ongoing effort to develop and maintain representative indices for the Indian debt market. In addition to this index, CRISIL currently maintains 37 indices across bond, gilts, money market, hybrid and commodity segments, which are used by asset managers for benchmarking their products and portfolios. All CRISIL indices are public indices with details on index performance and portfolio constituents available on the CRISIL website (www.crisil.com) daily.

Mukesh Agarwal, President, CRISIL Research,
said, “Launch of the index further endorses CRISIL’s status as a pioneer in debt and hybrid indices in India. This index is expected to serve both as a benchmark and underlying index for investment products such as index funds. CRISIL will continue to develop indices that help market participants gauge the performance of different asset classes and make investment decisions in an otherwise shallow debt market.”

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