Green Masala Bonds
With a projected 6.5% growth rate in 2016 and 2017, and significant green infrastructure investments under way, the Indian economy is best placed to benefit from the current low-yield environment to further fuel its sustainable growth.
After the establishment of robust domestic rupee-denominated bond markets, international investors’ trust in the Indian currency is testified by the success recorded by the Indian rupee-denominated bonds listed on London Stock Exchange. The recent Indian green bond issuances on London Stock Exchange confirm investors’ confidence in the Indian rupee and in the quality of Indian issuers’ green projects. Indian Issuers on London Stock Exchange's dedicated green bond segments – banks and corporates, public sector enterprises and private companies – benefit from London’s deep pool of liquidity as well as from being able to diversify their investor base by tapping into London’s climate-aligned assets, while neutralising currency risks.
Recent issuances demonstrate that a vital new international channel of finance has opened up for Indian issuers - a few success stories and landmark listings are showcased here.
- In a pioneering issuance, Axis Bank issued India’s first certified Green Bond by a bank, in June 2016.
- In another landmark listing, NTPC issued a green bond in London in August 2016; the successful issuance, which was more than 1.45 times oversubscribed, made NTPC the first ever Indian quasi-sovereign to list an offshore rupee bond.
- In June 2016, London Stock Exchange hosted a landmark Indian Green Infrastructure Investment Coalition forum, bringing together multilateral development banks, institutional investors and infrastructure project developers to discuss green financing opportunities in the Indian market.
- In August 2015, the International Finance Corporation became the first issuer globally to issue a green bond denominated in offshore Indian rupees, coining the term “Green Masala Bond”.