Now Reading: India’s green bonds fetch highest greenium as insurers drive demand
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India’s green bonds fetch highest greenium as insurers drive demand
India’s green bonds fetch highest greenium as insurers drive demand
India’s sovereign green bonds commanded an average premium of four basis points over comparable government debt in the first half of fiscal 2026, the highest since sales began in January 2023. On…
The Story in Brief
India’s sovereign green bonds commanded an average premium of four basis points over comparable government debt in the first half of fiscal 2026, the highest since sales began in January 2023. On Friday, New Delhi sold Rs 5,000 crore of 30-year green bonds at a greenium of four bps, with insurers driving demand because the bonds qualify as infrastructure assets for regulatory purposes.
Market participants, including CIOs from Generali Central Life and Axis Max Life Insurance, have called for a larger supply in the second half of FY27. Total outstanding sovereign green bonds now stand at Rs 87,700 crore, with 30-year maturities crossing Rs 50,000 crore. The greenium disappeared in early issuances but returned after the government focused on longer-tenor bonds over the past 18 months.
The Indian Opinion
The narrative around India’s green bonds has swung from early struggles to triumphant demand, missing a nuance: the greenium exists because the government issues almost only 30-year bonds, matching insurers’ long-term liabilities. That is clever treasury management, not a sudden green revolution. The real test will come if New Delhi diversifies tenors to five or ten years in H2 FY27. Will the greenium hold then, or was it just a maturity mismatch at work?
Source: thehindu.com
This story was synthesised by AI from the source linked above.
