| Sebi to set rules, offer sops for green bonds Move aimed at encouraging domestic listing of such bonds |
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Mumbai, 26 November The Securities and Exchange Board of India ( Sebi) is set to unveil rules on monitoring the end use of green bonds, and might propose incentives for companies to issue them at its board meeting on November 30 ( next Monday). "Sebi is working on regulations that will incentivise companies to launch green bonds. We would like these bonds to be listed on the domestic exchanges instead of on overseas exchanges," said a source privy to the development. "Regulations by Sebi are likely to be followed by regulations by the Reserve Bank of India ( RBI) so that they can offer competitive rates," said another person familiar with the matter. Neither source wished to be named because no official statement had been made yet. An e- mail to a Sebi spokesperson remained unanswered. The move will enable Indian companies to raise capital at home through this instrument. It will also be a major step towards the government's commitment on reducing India's carbon footprint. Green bonds invest in environment- friendly projects in areas like renewable energy, waste management, clean transportation, sustainable water management and climate change adaptation. Lack of regulation has forced a majority of Indian players to tap the market abroad for green bonds. Earlier this year, lenders, including YES Bank and Export Import ( Exim) Bank, did green bond issuances abroad. IDBI Bank announced on Thursday that it had raised ₹ 2,310 crore via green bonds in Singapore. Companies such as ReNew Power and Hindustan Powerprojects had to launch these bonds by tying up with financial institutions instead of launching them on their own due to lack of regulations or a special dispensation for these bonds. The clean energy arm of Hindustan Power Project entered the credit- enhanced bond market with an issue fully underwritten by YES Bank. ReNew Power Ventures was the first Indian company to issue credit- enhanced green bonds, raising $ 68 million, backed by Goldman Sachs. "Lenders find it feasible to list on overseas exchanges because there are classes of investors there that invest in these bonds," said Ajay Manglunia, head of fixed income, Edelweiss Securities. There are no incentives associated with these bonds for Indian issuers or investors, apart from being infrastructure bonds that do not attract statutory banking reserve requirements. Experts are viewing this as a first step towards the government's aim of 175 gigawatt of renewable energy in the country by 2022. According to an HSBC report, this ambition might be too steep. To reach a new climate agreement at the Paris COP21, India would need to invest at least $ 2.5 trillion by 2030, The Financial Times recently reported. Turn to Page 18 > FUND- RAISING VIA QIPs AT 19- MONTH LOW The fall of markets from their peak levels earlier this year, and the range- bound movement since then, has kept firms at bay from raising funds via the QIP route, which hit a 19- month low in November MFs START EQUITY TAPER TOWARDS YEAR- END After investing an average ~8,200 crore each in the first six months of the financial year, mutual fund managers invested just an average ~3,600 crore in October and November GREEN BONDS STRIKE ROOT What are green bonds? Structured like ordinary bonds but will invest in |
| Sebi to set rules, offer sops for... |
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