Sebi notifies stronger framework for green bonds; introduces concept of blue, yellow bonds


PTI, Feb 3, 2023, 5:32 PM IST

Markets regulator Sebi on Friday strengthened the framework for green bonds by introducing the concept of ‘blue’ and ‘yellow’ bonds as new modes of sustainable finance.

Blue bonds relate to water management and marine sector, while yellow bonds pertain to solar energy. These are sub-categories of green debt securities.

For this, the Securities and Exchange Board of India (Sebi) amended norms governing issue and listing of non-convertible securities, according to a notification.

The amendment came after the board of Sebi approved a proposal in this regard in December.

As per the notification, the watchdog has strengthened the framework for green bonds by enhancing the scope of definition of green debt security by including new modes of sustainable finance in relation to pollution prevention and control and eco-efficient products.

These measures have been taken in the backdrop of increasing interest in sustainable finance in India as well as around the globe, and with a view to align the extant framework for green debt securities with the updated Green Bond Principles (GBP) recognised by IOSCO.

The regulatory framework defines Green Debt Securities as debt securities issued for raising funds that are to be utilised for projects or assets falling under certain categories.

Indian companies raised nearly USD 7 billion through ESG (Environmental, Social and Governance) and green bonds in 2021 compared to USD 1.4 billion in 2020 and USD 4 billion in 2019.

Most of the green bonds issued by Indian issuers are listed on offshore exchanges as issuers are finding it more attractive to list on bourses falling outside Sebi’s framework.

The regulator, which came out with a consultation paper in November, mentioned that one of the main hurdles for further growth has been a consistent and robust approach to identifying what is considered ‘green’. A lack of clarity in this regard leads to ‘greenwashing’.

With regard to the period of subscription, Sebi said a public issue of debt securities or non-convertible redeemable preference shares would be kept open for a minimum of three and a maximum of 10 working days.

In case of a revision in the price band or yield, the issuer would extend the bidding or the issue period disclosed in the offer document for a minimum period of three working days.

”In case of force majeure, banking strike or similar circumstances, the issuer may, for reasons to be recorded in writing, extend the bidding (issue) period disclosed in the offer document,” Sebi said.

However, the overall issue period would not exceed 10 working days.

Under the rules, an issuer making issuance of non-convertible securities has the right to recall such securities prior to the maturity date.

As per the notification, the issuer of green bond is required to send a notice regarding recall or redemption of non-convertible securities, prior to maturity, to all the eligible holders of such securities and the debenture trustees at least 21 days before the date from which such right is exercisable.

The issuer would have to simultaneously provide a copy of such notice to the stock exchange, where the non-convertible securities of the issuer are listed, for dissemination on its website.

The issuer and the debenture trustee execute the trust deed, which need to contain a provision mandating the issuer to appoint the person nominated by the debenture trustee as a director on its board within one month from the date of receipt of nomination from the debenture trustee.

Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.

Top News

NEET Row: Bihar Police recover 6 post-dated cheques ‘issued for question paper facilitators’

Congress slams ruling govt for statues’ relocation within Parliament, calls it ‘unilateral’ move

‘Sweeping generalisation’: BJP counters Elon Musk over EVM remark

No need to teach about riots, demolition in schools; no attempts to saffronise textbooks: NCERT chief

Puttur: 2 killed after two cars collide head-on

ICC’s Big American Dream: Too many loose ends, over-dependence on Indian market

BJP to stage protests across Karnataka against fuel price hike

Related Articles More

Sitharaman to hold pre-budget meeting with industry chambers on Jun 20

Mcap of five of top-10 most valued firms jumps Rs 85,582 cr; LIC biggest gainer

Manipal Energy and Infratech Limited (MEIL) bags “India 5000 Awards”

Govt must ensure corporate takeovers are fair, monopolies are not created: Congress on Adani acquiring Penna Cements

Sensex, Nifty hit fresh lifetime highs on buying in blue-chips HDFC Bank, Reliance

MUST WATCH

Road Mishap

VEENA STORES MALLESHWARAM

Kapu

Darshan Arrest | Renukaswamy Case

Udupi accident


Latest Additions

Ton-up Smriti, spinners hand India massive 143-run win over South Africa in 1st ODI

Police seal Navi Mumbai meat shop for ‘hurting’ religious sentiments

NEET Row: Bihar Police recover 6 post-dated cheques ‘issued for question paper facilitators’

Fresh political slugfest over EVM tampering claims; Defamation notice issued to newspaper by poll body

Limbs of newborn found in Goa, bitten by animals; FIR registered

Thanks for visiting Udayavani

You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.