India's Larsen & Toubro may explore another ESG bond issue after debut attracts premium, spokesperson says
Indian infrastructure major Larsen & Toubro could raise funds through environmental, social and governance bonds again, after its first-ever issuance of the notes was sold at a premium, a company spokesperson said on Wednesday.
ADVERTISEMENT In the debut bond sale under India's newly-introduced ESG debt securities framework, L&T on Wednesday raised 5 billion rupees ($58 million) through three-year notes at a coupon of 6.35%.
This compares with 6.45%-6.50% secondary market yields on the company's near three-year bonds, according to merchant bankers.
"We remain open to raising more funds through ESG-linked issuances...," the spokesperson told Reuters. "Should the need arise, and if market conditions are conducive, we may consider the ESG debt market again." The notes, rated AAA by Crisil, saw banks and mutual funds as investors, the spokesperson said.
SBI Mutual Fund was the anchor investor and bought at least 750 million rupees of the bonds, bankers said. The fund house did not reply to a Reuters email seeking comment.
ADVERTISEMENT "We were able to achieve beneficial pricing on this ESG bond issuance compared to our plain vanilla bonds. The strong investor interest in credible ESG-labelled instruments helped us price the bond attractively," the L&T spokesperson said. The deal signals that credible ESG-labelled issuances can secure premium pricing purely on the strength of transparency and investor confidence, said Venkatakrishnan Srinivasan, founder and managing partner at debt advisory firm Rockfort Fincap.
ADVERTISEMENT "Going ahead, this could open the gates for more corporates to access the ESG bond market, and issuers with strong sustainability credentials may benefit from favourable pricing."
(You can now subscribe to our ETMarkets WhatsApp channel)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Indian Express
43 minutes ago
- Indian Express
World's biggest banks increased fossil fuel financing by $162 billion in 2024: Report
The world's largest 65 banks committed $869 billion in 2024 to companies in the fossil fuels sector, up from $707 billion in 2023, with State Bank of India (SBI) one of nearly 50 large banks that increased their financing for the same compared to the previous year. 'This growth in fossil fuel finance is troubling because new fossil fuel infrastructure locks in more decades of fossil fuel dependence. As the IEA's (International Energy Agency) 2024 Energy Investment Outlook report states, '(a)chieving net zero emissions globally by 2050 would mean annual investment in oil, gas, and coal falls by more than half' by 2030,' said the Fossil Fuel Finance Report 2025 by a group of eight environment organisations together called Banking on Climate Chaos Coalition. To be sure, SBI accounted for only a fraction of the total fossil fuel financing in 2024 and only saw a small increase last year compared to other lenders. As per the report, SBI was the only Indian bank in the top 65 with a $65 million increase in fossil fuel financing in 2024 from 2023 to $2.62 billion, putting it at the 47th spot out of the 65 banks, up from 49 in 2023. In comparison, JPMorgan Chase retained its top spot in the list as it gave $53.5 billion to fossil fuel companies last year, $15 billion more than it did in 2023. This is more than SBI's total fossil fuel financing of $10.6 billion from 2021 to 2024. Earlier this year in February, SBI Chairman CS Setty said the bank is targeting to be net zero in terms of emissions by 2055. Before that, the bank is aiming to have at least 7.5 per cent of its domestic gross advances to be green advances by 2030. As at the end of the quarter ended March, SBI's domestic advances stood at Rs 36.02 lakh crore. It had sanctioned a combined fund and non-fund-based limit of Rs 20,558 crore for sustainable finance activities. According to Bengaluru-based think-tank Climate Risk Horizons, coal financing is a 'huge blind spot' for Indian banks. 'Among the top 1000 BSE-listed banks as of March 2024, only Federal Bank and RBL Bank have adopted explicit coal exclusion or phase-out policies… The economics are clear: coal is no longer the cheap energy source it once was. Renewable energy and storage can now provide electricity at or below the cost of coal, with continued cost declines likely,' the think-tank's analysts said in a post in March 2025 warning that Indian banks were falling behind in the sustainable finance race. The report found that fossil fuel financing by the world's largest banks rose in 2024 after declining in 2023 came amid watering down of exclusion policies and policy rollbacks. '…what was once largely a North American trend is now going global. European banks –often seen as more progressive on climate due to the quality of their sector policies – also began backtracking,' it said. In March, American lender Wells Fargo scrapped plans to become net zero by 2050, weeks after US President Donald Trump signed an executive order announcing the country's withdrawal from the Paris Agreement. The US' withdrawal — which will take effect in early 2026 and see the world's largest economy join Iran, Libya, and Yemen as those not party to the Paris Agreement — has been part of a series of steps taken by the Trump administration to promote fossil fuels even in the face of 2024 being the hottest year ever recorded. In January, the US Treasury Department withdrew its membership of the Network of Central Banks and Supervisors for Greening the Financial System —a voluntary global coalition that looks to mobilise green finance and develop recommendations for climate-risk management in the financial sector — as part of the aforementioned executive order signed by Trump. And ahead of Trump's inauguration, the US' six largest banks left the UN-sponsored Net Zero Banking Alliance. A committee of the US Senate also approved draft legislation this week that would hit key tax incentives for clean energy. The increase in fossil fuel financing by banks in 2024 marked a reversal of decreasing lending to the segment. While nearly $3.3 trillion has been made available to fossil fuel businesses since 2021, the 65 banks in the 2025 report have committed $7.9 trillion in fossil fuel financing since the Paris Agreement came into force in 2016. In 2024, financing for acquisitions increased by $19.2 billion to $82.9 billion. While mergers and acquisitions don't directly create new infrastructure, 'this consolidation — for which bank financing is critical — is often an attempt to grow the power and competitiveness of fossil fuel companies, at a time when the world actually needs to phase out fossil fuels', the report said. Siddharth Upasani is a Deputy Associate Editor with The Indian Express. He reports primarily on data and the economy, looking for trends and changes in the former which paint a picture of the latter. Before The Indian Express, he worked at Moneycontrol and financial newswire Informist (previously called Cogencis). Outside of work, sports, fantasy football, and graphic novels keep him busy. ... Read More
Hindustan Times
an hour ago
- Hindustan Times
Brigade Group launches housing project with potential of ₹2,100 crore in South Chennai
Bengaluru-based listed real estate developer Brigade Group announced on June 21 a residential project in South Chennai with a gross development value (GDV) of ₹ 2,100 crore. Bengaluru-based listed real estate developer Brigade Group announced on June 21 a residential project in South Chennai with a gross development value (GDV) of ₹ 2,100 crore ( Picture for representational purposes only) (Pixabay) The company said the project is located on the Sholinganallur–Medavakkam corridor in South Chennai. It is spread across 14.7 acres and has a potential for 2.2 million sq ft of premium apartments. The company said that it will develop 1,250 units, with the largest units spanning up to 2,599 sq ft, in 2,3—and 4-BHK sizes. According to the company, the project named Brigade Morgan Heights is strategically positioned just 150 meters from the upcoming Classical Tamil Institute Metro Station and ensures smooth connectivity to key IT parks—including ELCOT, Wipro, and Cognizant—each reachable within a mere 10-minute drive, significantly enhancing its appeal for working professionals. Also Read: Brigade Group's flexible workspace arm BuzzWorks signs 24,000 sq ft workspace with Infor India in Hyderabad The company said that the project will be executed via a Joint Development Agreement (JDA), and will be equipped with rooftop solar panels covering one-third of the terrace space to power common areas, rainwater harvesting systems, groundwater recharge, and an organic waste converter. The centrepiece is a 40,000 sq ft clubhouse offering over 30 curated amenities. Also Read: Brigade Group to add 8 million sq ft of office space, plans to double flex space portfolio Brigade Enterprises MD Pavitra Shankar said, 'Chennai continues to be a vital market for Brigade Group, and this expansion aligns with our vision of delivering high‑quality residential developments in upcoming urban corridors. With its prime location, proximity to IT hubs, and a serene green backdrop, Brigade Morgan Heights will offer an unparalleled living experience integrating comfort, sustainability and modern living." Also Read: Less than 1% of Indian developers' topline is invested in technology, says Nirupa Shankar of Brigade Group Meanwhile, the company said that this launch not only reinforces Brigade Group's commitment to Chennai—a city where it plans nearly ₹ 8,000 crore worth of developments by 2030—but also marks a significant milestone in its portfolio of landmark projects, which includes flagship properties like the World Trade Centre and Orion Mall.
Hindustan Times
an hour ago
- Hindustan Times
Zelensky urges Western allies to allot 0.25% GDP for Ukraine's defense industry
Ukrainian President Volodymyr Zelensky called on Ukraine's Western partners to allocate 0.25% of their GDP towards helping Kyiv ramp up weapons production, reported Reuters. Ukraine is in immediate need of improved weaponry and better ammunition.(REUTERS) "Ukraine is part of Europe's security and we want 0.25% of the GDP of a particular partner country to be allocated for our defence industry and domestic production," Zelensky said. "We have launched a program 'Build with Ukraine' and in summer we will sign relevant agreements to start exporting our technologies abroad in the format of opening production lines in European countries," Zelensky said. This year Kyiv had secured $43 billion to finance its domestic weapon production, he added. As Russia is bigger and more equipped than Ukraine, and the strife between the two has been escalating in the past few weeks, Zelensky's country is in immediate need of improved weaponry and better ammunition. Kyiv plans to launch joint weapon production outside of the country and will start exporting some of its military production technologies, the President affirmed. In the remarks released for publication by his office on Saturday, Zelenskiy said Ukraine was in talks with Denmark, Norway, Germany, Canada, the United Kingdom, and Lithuania to launch joint weapon production. According to the report, Ukraine's 40% defence needs are presently covered with domestic production, and the government is on the lookout for ways to boost this production in the future. Zelensky attended the G7 summit in Canada last week. He especially wanted to meet US President Donald Trump to discuss the ongoing conflict between Russia and Ukraine, help impose stronger sanctions against Russia and urge increased military support for his country. This effort went in vain as Trump left the summit a day early to address the Israel-Iran conflict in Washington. The Ukrainian President is likely to attend the upcoming NATO summit, where he will be meeting several Western leaders. He would also make a second attempt to meet Donald Trump after the G7. With inputs from agencies
