Bank raises ₹10,000 crore through 7-year Green Infrastructure Bonds at 7.10% coupon, signaling strong investor confidence and a major boost for India’s ESG financing ecosystem
By Rusen Kumar
MUMBAI (India CSR): In a landmark development for India’s sustainable finance ecosystem, Bank of Baroda (BoB) has become the first bank in India to issue a Green Infrastructure Bond in the domestic market, successfully raising Rs. 10,000 crore through its Series I Long-Term Green Infrastructure Bonds.
Founded on July 20, 1908, by Sir Maharaja Sayajirao Gaekwad III, Bank of Baroda is one of India’s leading public sector banks. The Government of India holds a 63.97% stake in the institution.
The bond issuance witnessed strong investor enthusiasm, with bids totaling Rs. 16,415 crore, more than three times the base issue size of Rs. 5,000 crore. The seven-year bonds were issued through the Electronic Bidding Platform (EBP) of the National Stock Exchange (NSE) and carried a competitive coupon rate of 7.10% per annum.
The successful issuance marks a major milestone for India’s domestic ESG bond market, demonstrating growing investor appetite for sustainable finance instruments.
Strong Investor Demand Highlights ESG Momentum
The bond issue was structured with a base size of Rs. 5,000 crore along with a greenshoe option of Rs. 5,000 crore, allowing the bank to increase the issue size based on investor demand.
Despite volatility in financial markets, the offering received overwhelming participation from institutional investors, reflecting confidence in Bank of Baroda’s financial strength and its commitment to environmental sustainability.
The cut-off coupon of 7.10% also enabled the bank to achieve a “Greenium”, a pricing advantage typically associated with green bonds where investors accept slightly lower yields due to the sustainability benefits of the project financing.
This greenium indicates that investors are increasingly prioritizing environmental, social and governance (ESG) investments.
The bank serves over 180 million customers globally through approximately 65,000 touchpoints across 15 countries spanning five continents.
A Milestone for India’s Domestic Green Bond Market
The issuance represents a significant step forward for India’s sustainable finance architecture. While green bonds have been issued in international markets earlier, Bank of Baroda’s issuance marks the first time an Indian bank has raised such funds domestically specifically for green infrastructure projects.
Green bonds are considered a key financial instrument to channel capital into environmentally responsible projects, including renewable energy, clean transportation, energy efficiency, and climate-resilient infrastructure.
The initiative aligns with India’s broader goals of:
- Expanding renewable energy capacity
- Financing sustainable infrastructure
- Supporting the country’s net-zero transition
CEO Highlights Commitment to Sustainable Growth
Commenting on the achievement, Dr. Debadatta Chand, Managing Director & CEO of Bank of Baroda, described the issuance as a landmark moment for both the bank and India’s ESG finance ecosystem.
“The Green Infrastructure Bond issue marks a significant milestone for Bank of Baroda and a defining moment for India’s domestic ESG bond market. Raising Rs. 10,000 crore with such strong demand and attractive pricing demonstrates the deep confidence investors have in the Bank and in our commitment to green and sustainable growth as part of our broader ESG journey.”
He further emphasized that the funds will help accelerate India’s transition toward a greener economy. “These funds will support India’s infrastructure needs, enabling a transition towards a cleaner, greener and more sustainable future.”
Funds to Support Renewable Energy and Green Infrastructure
According to the bank, the proceeds from the bond issuance will be deployed toward eligible green projects under the bank’s Green Financing Framework and in accordance with regulatory guidelines.
The financing will help create long-term funding support for climate-friendly infrastructure, which is essential for India’s sustainable development agenda.
Key sectors expected to benefit include:
- Renewable energy projects such as solar and wind power
- Sustainable infrastructure initiatives
- Environmentally responsible energy and industrial projects
Highest Credit Ratings Boost Investor Confidence
The bonds carry the highest credit rating of ‘AAA’ with a Stable outlook, assigned by both Care Ratings and ICRA, reinforcing investor confidence in the security and stability of the instrument.
The strong ratings combined with ESG alignment made the bond highly attractive to the market.
High credit ratings play a crucial role in attracting institutional investors such as:
- Mutual funds
- Insurance companies
- Pension funds
- Banks and financial institutions
Bank of Baroda’s strategic vision focuses on building trust, expanding digital banking, and supporting sustainable economic growth, positioning itself as a key player in India’s evolving financial landscape. Through its digital banking platforms and global network, the bank offers a wide range of financial products and services.
About the Author:
Rusen Kumar, Editor of India CSR, is a renowned thought leader in the field of Corporate Sustainability and Corporate Social Responsibility (CSR). He regularly writes insightful articles and conducts interviews with industry leaders, policymakers, and development practitioners, promoting dialogue on responsible business and sustainable development.
(India CSR)
