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State-owned Bank of Baroda has raised INR 10,000 crore through the issuance of long-term green infrastructure bonds, marking the first such domestic issuance by an Indian bank. The seven-year bonds were issued via the Electronic Debt Bidding platform of the National Stock Exchange of India and attracted bids worth INR 16,415 crore against a base issue size of INR 5,000 crore, prompting the bank to exercise a green shoe option of an additional INR 5,000 crore. The bonds were priced at a cut-off coupon of 7.10 per cent despite volatile market conditions. Proceeds from the issuance will be deployed towards eligible green projects, including renewable energy and environmentally sustainable infrastructure, in line with the bank's green financing framework and regulatory guidelines.
Bank of Baroda has raised INR 10,000 crore through the issuance of long-term green infrastructure bonds, becoming the first bank in India to issue such an instrument in the domestic market. Advertisement
The seven-year bonds were issued through the Electronic Debt Bidding platform of the National Stock Exchange of India, with the bank initially setting a base issue size of INR 5,000 crore along with a green shoe option of an additional INR 5,000 crore.
According to the bank, the issue received strong investor participation, attracting bids aggregating INR 16,415 crore more than three times the base issue size. The oversubscription enabled the bank to exercise the green shoe option and raise the full INR 10,000 crore.
Despite prevailing volatility in financial markets, the bank secured a competitive cut-off coupon rate of 7.10 per cent for the seven-year instrument. The pricing outcome reflected robust investor demand and confidence in the bank's credit profile and sustainability initiatives.
The bank said that, due to the favourable pricing achieved in the issuance, it realised a greenium a pricing advantage typically associated with bonds linked to environmentally sustainable financing. The outcome was attributed to investor interest in sustainable investment instruments and the bank's environmental, social and governance (ESG) roadmap.
Proceeds from the bond issuance will be deployed towards eligible green projects in accordance with the bank's green financing framework and applicable regulatory norms.
These funds are expected to support long-term financing requirements across environmentally sustainable sectors, including renewable energy projects and other green infrastructure initiatives.
The issuance forms part of the bank's broader strategy to expand its sustainable financing portfolio while mobilising long-tenor capital for infrastructure-related lending.
Source - PTI
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