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NABARD plans India’s maiden social sector bond, eyes 30-40 bln rupees

Informist, Tuesday, Sep 5, 2023


–Sources: NABARD plans India’s first social sector bond issue

–Sources: NABARD eyes 30-40 bln rupees via maiden social sector bond

–Sources: NABARD may seek bids for 5-yr social sector bond this month


By Asmita Patil and Subhana Shaikh


MUMBAI – India’s corporate bond market is set to witness its first ever social sector bond offering, with state-owned National Bank for Agriculture and Rural Development set to tap the primary market with the issuance this month itself, sources familiar with the development told Informist. The big-ticket issuer plans to raise up to 30-40 bln rupees through the social sector bonds maturing in five years, they said.


The details of the bond issuance by the lender for rural development are still in the works and await final approvals, said a source involved in the transaction. “Yes, we are planning to come with social bonds, however, date and amount yet to be finalised,” the source said.


Social sector bonds are debt instruments used to fund new and existing projects with positive social outcomes.


According to sources, proceeds of this bond offering will be used to fund water projects in Telangana.


According to market participants, NABARD’s social sector bond offering is expected to see robust demand from investors since its tenure will appeal to mutual fund houses and long-term investors such as insurance companies and pension fund houses.


Today, the yield on papers issued by NABARD maturing in five years ended at 7.64-7.65% in the secondary market of corporate bonds.


In March, the state-owned company’s board had approved raising up to 3.78 trln rupees in 2023-24 (Apr-Mar). 

So far in the current financial year, it has raised 184.07 bln rupees through four bond issuances.  End


Edited by Ranjana Chauhan


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Source: Cogencis

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