Bank of Baroda Raises ₹10,000 Crore Through India’s First Domestic Long-Term Green Infrastructure Bonds
Bank of Baroda has raised ₹10,000 crore through the issuance of long-term green infrastructure bonds in the domestic market, marking the first such issuance by an Indian bank locally, the lender announced on March 5.Strong Investor Demand for the Green Bond Issue
The Series I bonds carry a maturity period of seven years and were issued via the electronic book provider platform of the National Stock Exchange of India.The offering had a base issue size of ₹5,000 crore along with a greenshoe option of another ₹5,000 crore. Both portions of the issue were fully subscribed, highlighting strong investor participation.
The bond issue attracted bids worth ₹16,415 crore, which was more than three times the base issue size. The bank set the coupon rate for the bonds at 7.10 percent per annum.
Pricing Reflects Greenium Advantage
According to Bank of Baroda, the pricing achieved in the issuance reflects a greenium. This term refers to the slightly better pricing that green-labelled bonds can obtain compared with conventional bonds due to strong investor demand for sustainable investments.Debadatta Chand, Managing Director and Chief Executive Officer of Bank of Baroda, said the issuance represents a significant development for both the bank and the domestic sustainable finance market.
“The Green Infrastructure Bond issue marks a significant milestone for Bank of Baroda and a defining moment for India’s domestic ESG bond market,” Chand said.
Funds to Support Renewable Energy and Sustainable Projects
The proceeds from the bond issuance will be deployed to finance eligible green projects under the bank’s green financing framework and in line with regulatory guidelines.The funds are expected to support initiatives in renewable energy and other environmentally sustainable infrastructure sectors.
Highest Credit Ratings Assigned
The bonds have been assigned ‘AAA’ ratings with a stable outlook by CARE Ratings and ICRA Limited, indicating a high level of creditworthiness and strong repayment capacity.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
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