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Bank of Baroda plans to raise up to INR 10,000 crore through green infrastructure bonds, with a base issue of INR 5,000 crore and a green shoe option to accept oversubscription of another INR 5,000 crore. The seven-year bonds, rated by CARE and ICRA, will offer annual interest and be allocated via closed bidding on the EBP platform. Investors can apply starting from INR 1 lakh. The bonds aim to support environmentally sustainable projects and highlight the bank's ongoing commitment to green financing initiatives.
State-owned Bank of Baroda is set to raise up to INR 10,000 crore by issuing green infrastructure bonds early next week. The base size of the issue has been fixed at INR 5,000 crore, with an option to accept oversubscription of an additional INR 5,000 crore, taking the total potential issue to INR 10,000 crore, according to market sources. Advertisement
The bonds will carry a tenor of seven years and are scheduled to mature in 2033. The pay-in and allotment, when investors exchange money for the bonds, will occur immediately after issuance. The bidding window for the bonds will be open from 11:00 am to 12:00 pm through the National Stock Exchange of India's Electronic Book Provider platform.
These bonds have been rated with a stable outlook by both CARE Ratings and ICRA. They will offer annual interest payments and will be allocated on a uniform yield basis through a closed bidding process. Investors can apply with a minimum of INR 1 lakh and in multiples of INR 1 lakh thereafter.
The launch of these green bonds reflects a growing trend among Indian banks to raise funds specifically for environmentally sustainable infrastructure projects. Bank of Baroda has previously issued bonds for infrastructure funding, and this move reinforces its focus on supporting green initiatives while tapping into the growing appetite among investors for ESG-linked investment options.
Source PTI
FAQ
1. What is Bank of Baroda planning with the green bonds?
Bank of Baroda, a Bank of Baroda, plans to raise up to INR 10,000 crore through the issuance of green infrastructure bonds. The base issue is INR 5,000 crore, with an option to accept an additional INR 5,000 crore through a green shoe option if oversubscription occurs. The proceeds will fund environmentally sustainable infrastructure projects, reinforcing the bank's commitment to green financing initiatives.
2. What are the key features of the bonds?
The bonds will have a tenor of seven years, maturing in 2033, and offer annual interest payments to investors. Both CARE Ratings and ICRA have assigned a stable rating to the bonds, reflecting their low credit risk. They will be allocated via closed bidding on the NSE's Electronic Book Provider (EBP) platform on a uniform yield basis.
3. Who can invest in these bonds and what is the minimum application?
Investors can participate by applying with a minimum amount of INR 1 lakh, and further investments can be made in multiples of INR 1 lakh. The bonds are expected to attract institutional investors, retail investors, and ESG-conscious participants seeking stable returns while supporting sustainable projects.
4. What is the purpose of the green bonds?
The funds raised will be specifically earmarked for environmentally sustainable projects, such as renewable energy, water management, green transportation, and eco-friendly urban infrastructure. This aligns with Bank of Baroda's ongoing ESG and green financing strategies, helping to promote India's sustainable development goals.
5. How will the bond issuance be conducted?
The bonds will be issued through the NSE EBP platform, with the bidding window open from 11:00 am to 12:00 pm. Allocation will be on a uniform yield basis, ensuring transparency and equal pricing for all investors. Pay-in and allotment will take place immediately after issuance.
6. Why are green bonds becoming important in India?
Green bonds are part of a growing trend where banks and corporates raise capital specifically for sustainable infrastructure and climate-friendly projects. They cater to investors who prioritize environmental, social, and governance (ESG) criteria, while providing banks like Bank of Baroda a cost-effective way to fund green initiatives and strengthen their sustainable finance portfolio.
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