Now Reading: India’s green bonds draw steady demand at four-basis-point premium
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India’s green bonds draw steady demand at four-basis-point premium
India’s green bonds draw steady demand at four-basis-point premium
India sold Rs 5,000 crore of 30-year sovereign green bonds at a four-basis-point greenium on Friday, taking the average premium in the fiscal half-year to its highest since such sales began in…
The Story in Brief
India sold Rs 5,000 crore of 30-year sovereign green bonds at a four-basis-point greenium on Friday, taking the average premium in the fiscal half-year to its highest since such sales began in early 2023. The greenium means investors accept a lower yield for bonds funding sustainable projects. India’s outstanding sovereign green bonds now total Rs 87,700 crore, with 30-year notes accounting for more than Rs 50,000 crore.
The Hindu reports that insurers are driving demand because green bonds qualify under the infrastructure category for asset allocation and regulatory purposes. Market participants said the government could raise supply in the second half of FY27, especially through longer-term bonds. Separately, BusinessLine reported that the benchmark 2036 bond yield stood at 6.7511% before a Rs 32,000-crore auction.
The Indian Opinion
Claims that any green label automatically guarantees cheap government borrowing are overstated. The premium is real, but it is just four basis points and depends heavily on insurers’ regulatory needs and long-term liabilities. The opposite claim, that demand is too narrow to support more issuance, also looks weak after the latest sale. The useful test is whether larger auctions continue to clear at a greenium without weakening demand for ordinary government bonds.
Sources (2): thehindu.com, thehindubusinessline.com
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
