NABARD lists first social impact bond

Mumbai (Maharashtra) [India], September 29 : The National Bank for Agriculture and Rural Development (NABARD) has listed the country’s first social impact bond to the tune of Rs 1,000 crore.
NABARD chairman Shaji KV speaking to ANI after the listing on the BSE on Friday said it accepted bids worth Rs 1,040 at a coupon rate of 7.63 per cent.
Social bonds are fixed-income securities whose proceeds are typically earmarked to finance or re-finance new and existing social impact projects, especially for identified target populations such as low-income groups, unemployed, or vulnerable.
"Actually what we were trying to judge is whether there is enough appetite in the market or not. We found that the market is very much upbeat about these issuances and we got a subscription of 2.86 times...The bond size was Rs 1,000 crore with a greenshoe option of Rs 300 crore,” said the chairman.
“In fact, the market is also sensitive to these sustainability aspects of investing and this is a historic moment actually this is the first-ever triple AAA-rated domestic issuances in social space and I hope that the other market participants also will take note of this. In fact, we'll also follow up with a lot of such issuances in the future,” the chairman said.
On NABARD’s green bonds and their listing, he was hopeful of getting them listed by the end of the year.
“Green bonds need a lot of documentation and a lot of more data for verification by the investors. For that whatever the Sebi framework is, it needs to be followed. So that needs a lot of homework from our side. So in that aspect, what we checked is that our balance sheet actually is ready for green bond issuances,” he said.
“The only thing we need to do is we need to do little documentation to demonstrate to the investors that such activities are being undertaken by us and we are in the process of doing that. So hopefully by year-end, we'll have issuances coming,” he said.
Asked about India imposing a 40 per cent export duty on onion to maintain its ample domestic availability, the NABARD chairman, without getting into the nitty gritty, said those aspects are in the government domain.
“Actually, the government will have a holistic view of the price situation and other aspects. So they have taken a balanced view. That is what I can tell at this point in time. Onion price fluctuation is there and we are trying to smoothen those fluctuations through warehousing activities and also through sensitizing the farmers regarding the need to store. And also we are helping the researchers to improve the shelf life of onion. And in that aspect, the onion value chain is what we are concentrating on to smoothen the price fluctuations.”
The central government had decided it would maintain 3 lakh tonne of onions in the 2023-24 season as buffer stock. In 2022-23, the government maintained 2.51 lakh tonne onion as buffer stock. Buffer stock is maintained to meet any exigencies and for price stabilisation, if rates go up significantly during the lean supply season.
Rabi onion harvested during April - June accounts for 65 per cent of India's onion production and meets the consumer's demand till the Kharif crop is harvested in October-November.
Further, when asked about erratic rains that were witnessed in various parts of the country and was NABARD doing to deal with them, he said they are implementing several irrigation projects. India is predominantly dependent on monsoon rains for agricultural activities.
“So what we need to do is to reduce the dependence on monsoon to even out the effects of the erratic monsoon. In that context we are implementing a lot of irrigation projects jointly with state governments and also the Jal Jeevan Mission -- that is of course drinking water but then that will help come in handy for smoothening the effects of erratic monsoon. Then we are having also watershed programs where we are trying to reduce the dependence on monsoon on those areas where we develop the watershed and improve storages and also improve the groundwater levels so that no farmers can lift water in terms of their needs,” he added.