NABARD Issues India's First AAA Rated INR Social Bonds Worth Rs 1,040 Crore

by Priya Jadhav

• Private placement of redeemable, taxable, non-convertible, non priority sector, unsecured, social securities in the nature of bonds of face value ₹ 1 Lakh each under series 24-SB1  
• Base issue size of ₹ 1000 Crore and with an option to retain oversubscription by way of green shoe option of ₹ 2000 Crore aggregating to ₹ 3000 Crore 
• Bonds have been subscribed 2.86 times on the bidding day with accepted bids of Rs.1040.50 crores 
• India’s first externally certified AAA rated INR social bonds in the country to be listed on BSE on 29^th September 2023 
• Coupon-7.63% 

Mumbai, September 26, 2023: The National Bank for Agriculture and Rural Development (NABARD) issued its inaugural social bonds with a total size of Rs 1040.50 crore. This landmark move marks the first externally certified AAA rated INR social bonds in the country. Bonds were issued privately to eligible institutional investors on 26th September between 10:30 Am - 11:30 Am. These bonds are set to be listed on the Bombay Stock Exchange (BSE) on September 29, 2023.  

As India's apex development financial institution, NABARD is leading the way in sustainable finance. NABARD recently announced a Sustainability Bond Framework, which seeks to finance and refinance new or existing eligible green and social projects. Eligible social projects include affordable basic infrastructure, access to essential services, affordable housing, employment generation, food security, socioeconomic advancement, and empowerment. Projects that promise energy efficiency, including green buildings, energy storage, and smart grids, would also be eligible to get funding through the new breed of bonds that NABARD is rolling out.  

Redemption date for the bonds are on 27 September, 2028; the bonds are to be held for a period of 5 years with coupon payment taking place yearly.  

Arrangers to the Issue are A.K. Capital Services Ltd., ICICI Securities Primary Dealership Ltd. and Trust Investment Advisors Private Limited. 

The face value of each bond is Rs.1,00,000. The base issue size is Rs 1,000 crore, with an option to retain oversubscription up to Rs 2000 crore, thereby aggregating up to Rs.3000 crore. 

This momentous issuance has garnered an overwhelming response from the institutional investors, resulting in an impressive total bids of Rs 8590.50 crore. NABARD accepted Rs 1040.50 crore at coupon rate of 7.63%.  

These bonds have been given the highest AAA rating by CRISIL Ltd and ICRA Ltd. 

About NABARD: The National Bank for Agriculture and Rural Development (NABARD) is an apex development financial institution in India. Established on 12 July 1982, with headquarters in Mumbai, NABARD operates with a mission to promote sustainable and equitable agriculture and rural prosperity through effective credit support, related services, institutional development, and other innovative initiatives. NABARD plays a crucial role in fostering rural development, empowering farmers, and catalyzing the growth of the rural economy.