National Bank for Agriculture and Rural Development (Nabard) raises Rs 1,041 crore through India's first social impact bond.
Economy Business
National Bank for Agriculture and Rural Development (Nabard) raised Rs 1,041 crore through its social impact bond, which matures in five years, at a coupon of 7.63 per cent. Nabard’s base issue size was Rs 1,000 crore, and a green shoe option of another Rs 2,000 crore.This marks Nabard’s first externally certified AAA-rated social bonds in the country, said Nabard in a statement. The bonds have been rated AAA rating by CRISIL and ICRA.Nabard’s was a social sector special category bond. The number of investors for such causes, especially ESG and other banks, is not much. So they (Nabard) found it tough to raise the required amount and they didn't want to pay a higher coupon,” said Ajay Manglunia, managing director and head investment grade group at JM Financial. “So they decided to issue that much only. People were asking for slightly higher than the normal bond. So if you look at the pricing, which they attained, it was more or less in line with what the normal bonds of Nabard are today.”
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