NABARD Issues India’s First AAA Rated INR Social Bonds Worth Rs 1,040 Crore

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New Delhi, September 27, 2023: The National Bank for Agriculture and Rural Development (NABARD) issued its inaugural social bonds with a total size of Rs 1040.50 crore. This landmark move marks the first externally certified AAA-rated INR social bonds in the country. Bonds were issued privately to eligible institutional investors on 26 September between 10:30 A.m. 11:30 AM These bonds are set to be listed on the Bombay Stock Exchange (BSE) on September 29, 2023.

As India’s apex development financial institution, NABARD is leading the way in sustainable finance. NABARD recently announced a Sustainability Bond Framework, which seeks to finance and refinance new or existing eligible green and social projects. Eligible social projects include affordable basic infrastructure, access to essential services, affordable housing, employment generation, food security, socioeconomic advancement, and empowerment. Projects that promise energy efficiency, including green buildings, energy storage, and smart grids, would also be eligible to get funding through the new breed of bonds that NABARD is rolling out.

The redemption date for the bonds is on 27 September 2028; the bonds are to be held for a period of 5 years with coupon payments taking place yearly.

Arrangers to the Issue are A.K. Capital Services Ltd., ICICI Securities Primary Dealership Ltd., and Trust Investment Advisors Private Limited.

The face value of each bond is Rs.1,00,000. The base issue size is Rs 1,000 crore, with an option to retain oversubscription up to Rs 2000 crore, thereby aggregating up to Rs 3000 crore.

This momentous issuance has garnered an overwhelming response from institutional investors, resulting in an impressive total bid of Rs 8590.50 crore. NABARD accepted Rs 1040.50 crore at a coupon rate of 7.63%.

These bonds have been given the highest AAA rating by CRISIL Ltd and ICRA Ltd.