L&T Pioneers India’s ESG Bond Market with ₹500 Crore NSE Listing and Sustainability Targets – EQ
In Short : Larsen & Toubro (L&T) has listed India’s first ESG bonds worth ₹500 crore on the NSE, marking a milestone in sustainable finance. The three-year bonds, priced at 6.35%, saw strong investor demand, including ₹75 crore from SBI Mutual Fund. Linked to emissions and water use reduction targets, the bonds reflect L&T’s commitment to sustainability and future ESG financing.
In Detail : Larsen & Toubro (L&T) has made history by listing India’s first ESG bonds on the National Stock Exchange, marking a significant step in the country’s sustainable finance journey. The ₹500 crore issue consists of sustainability-linked non-convertible debentures, structured under SEBI’s newly introduced ESG framework.
The bonds carry a three-year tenure and offer a coupon rate of 6.35%. This rate is lower than L&T’s typical borrowing cost, which ranges between 6.45% and 6.50%, signaling strong investor confidence in the company’s ESG credentials and long-term goals.
Investor demand for the bond issue was robust, attracting wide participation from banks and mutual funds. SBI Mutual Fund anchored the issue with a ₹75 crore investment, highlighting growing institutional interest in ESG-focused debt instruments.
L&T has tied the bond’s performance to clearly defined sustainability targets. These include reducing freshwater consumption intensity and lowering greenhouse gas emissions. The bonds will mature on June 19, 2028, with interest paid annually.
The company’s ESG commitment aligns with its broader decarbonization and resource efficiency strategies. By embedding measurable KPIs into its financing, L&T is signaling accountability and transparency in its environmental efforts.
Encouraged by the positive response and favorable pricing, L&T is considering additional ESG bond issuances in the future. This move could pave the way for other Indian corporates to enter the ESG debt market and expand the country’s sustainable investment ecosystem.
