India sells 30-year green debt at 'greenium' last seen 3 years ago

MUMBAI: India on Friday sold 30-year green bonds at a 6-basis-point “greenium” to equivalent-maturity government securities, the largest such premium since January 2023, when the country began issuing the notes.

A greenium is the lower yield investors are willing to accept for bonds that finance environmentally sustainable projects.

The Reserve Bank of India sold the 30-year green bond at a 7.50% coupon, versus a 7.5628% yield on the 30-year 7.24% 2055 bond.

Including Friday’s sale, India has raised 777 billion rupees ($8.24 billion) through such papers.

“Today’s auction saw strong interest from the investors for green bonds. Infra classification of such bond makes it attractive bet for insurance companies,” Shobit Gupta, Chief Investment Officer, Generali Central Life Insurance.

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The green bond issue was subscribed about 2.5 times, resulting in a greenium of roughly 6 basis points over the comparable on-the-run security, he added.

Traders said demand came largely from a state-run insurer and other major insurance firms, especially after the government slashed supply of ultra-long bonds for the first half of the fiscal year.

India has reduced borrowing through 30- to 50-year bonds to 24.9% for April-September 2026, from 35% in April-September 2025 and 30% in October-March. It plans to raise 150 billion rupees through 30-year green bond sales, according to the borrowing calendar.

Market participants are urging the government to continue reissuing this bond to improve liquidity and help preserve the greenium.

“Most players prefer ultra-long green bond sale, as they may not be able to have any greenium in five-year or 10-year duration, which is mainly driven by traders,” a treasury official said requesting anonymity as he is not authorised to speak to media.