Nabard Plans To Issue 10-Year Infrastructure Bonds By December

The National Bank for Agriculture and Rural Development plans to issue a 10-year infrastructure bond by December, according to an official of the company.

Nabard also plans to issue green bonds worth Rs 5,000 crore by March 2024, the official told BQ reporters. For FY24, the overall bond issuances by Nabard are expected to be worth Rs 55,000 crore, he said.

The development finance institution issued first AAA-rated social bonds worth Rs 1,040 crore at a coupon rate of 7.63%. The base issue size is Rs 1,000 crore, and these bonds got listed on the BSE on Sept. 29.

The proceeds from social bonds will be utilised for irrigation and sanitation facilities in rural areas, said Shaji KV, chairman of Nabard on the sidelines of the above-mentioned bond listing on the BSE.

"We have already created certain assets from our own funds. So, those proceeds can be used to either re-finance those assets or create new ones, especially in the southern region," KV told BQ Prime.

On infra bonds, KV said that Nabard is also looking at monetising the issuance of assets from infra bonds. At present, whatever assets the institute is creating are of seven-year duration, and there are some assets of 10-year duration or more, he said.

However, the clubbing of environmental, social, and governance aspects in the infra-bond is something Nabard is looking at, KV said. "We are also looking at pure infra bonds."

Discussing about collaboration with fintechs, the chairman said that it is important to rationalise this aspect as rural-tech and agri-tech.

Nabard is also in talks with the government for a blended capital fund in order to fund early-stage tech companies, KV told BQ Prime. However, it is not actively looking at the overseas bond market but is keeping it under consideration, he said .

The DFI is improving its engagements with international organisations and is also in talks with the Asian Development Bank and the United Nations, KV said.