After social sector bonds, NABARD eyes 50 bln rupees via green bonds

After social sector bonds, NABARD eyes 50 bln rupees via green bonds

Informist, Friday, Sep 29, 2023

--NABARD head: Will issue green bonds in FY24 
--NABARD Jena: To raise around 50 bln rupees via 5-yr green bond FY24 

--NABARD Jena: To raise 550 bln rupees via bonds in FY24  

--NABARD Jena: To issue 2nd tranche of social sector bond in FY24 

--NABARD head:No definite plan to raise funds via overseas mkt for now

--NABARD head: Plan to issue infra bonds, but timeline not yet decided


MUMBAI – After its maiden social sector bonds issue, National Bank for Agriculture and Rural Development is now planning to raise funds through green bonds in the current financial year, Chairman Shaji K.V. said today. "Green bonds are the need of the hour. We are exploring if there are investors for green bonds, like how it is in overseas (market)," he said at the listing of NABARD's social sector bonds on BSE.


Speaking on the sidelines of the event, Chief General Manager Alok Jena said NABARD is looking to raise around 50 bln rupees through green bonds in 2023-24 (Apr-Mar). These bonds will have a maturity of five years, he added.


"...surely, you can expect a green bond issuance in the current financial year. Going forward, many of our borrowings will be in the social sector, sustainability or green space," Shaji said on the sidelines.


Jena said NABARD is also looking to tap the market with another tranche of social sector bonds in 2023-24.


Earlier this month, NABARD raised 10.41 bln rupees through social sector bonds maturing in five years at a coupon of 7.63%. The issue had a base size of 10 bln rupees and a greenshoe option of 20 bln rupees.


On Sep 15, NABARD chairman had exclusively told Informist that the bonds will be launched on Sep 29. 


When asked if the largest issuer of corporate bonds will raise funds through the international market, Jena said they may not look at it this financial year. "Overseas fundraising may not be this year. There would be greenium over there, but ultimately you will end up paying more than you would do here," Jena said.


So far in the current financial year, NABARD has raised 250 bln rupees through bonds. Overall, it will raise 550-600 bln rupees through bonds in 2023-24, Jena said. "So far, we have raised 25,000 crores (250 bln rupees) through bonds, but we have taken much more via CP (commercial papers), CDs (certificates of deposit). In the second half, we will look to raise around 35,000 crores (350 bln rupees)," he said.


Earlier this week, the government said that it will raise 200 bln rupees through sovereign green bonds of 5-, 10- and 30-year maturity, as part of its borrowing programme. Last year, it raised 160 bln rupees in its maiden issuance of such bonds maturing in five and 10 years.


On the development of the green bond market in India, Shaji said that NABARD will initiate talks with the government and the Securities and Exchange Board of India to create regulations for such securities.


"If you see parallelly on the lending side, there is direct lending like public sector lending, which lends towards a particular sector...Similarly, we can bring out something on the investment space. We will start talks with the government and SEBI also for sustainable investments," Shaji said.


Shaji also said that there is a need for NABARD to raise funds through infrastructure bonds. "We want to have longer-term bonds, we want to issue infrastructure bonds because we are one of the major players in the rural infrastructure space and we want to support that. We are planning, but we have not arrived at a definite timeline yet."  End


Reported by Subhana Shaikh

Edited by Ashish Shirke


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