By introducing the concept of “blue” and “yellow” bonds as new forms of sustainable finance, markets regulator SEBI enhanced the environment for green bonds on Friday. Water is related to blue bonding. Yellow bonds are related to solar energy, whereas management and marine sector bonds are about. which are green debt securities’ subcategories.
According to a notification, SEBI modified the rules regulating the issuance and listing of non-convertible securities to account for this. Following the board of SEBI’s approval of a proposal in December, the adjustment was made. In order to connect the current framework for green debt securities with the updated Green Bond Principles (GBP) recognised by IOSCO, these measures have been implemented against the backdrop of growing interest in sustainable finance in India as well as globally.
According to the regulatory framework, green debt securities are debt instruments that are issued in order to raise money for certain projects or assets. Compared to $1.4 billion in 2020 and $4 billion in 2019, Indian enterprises raised approximately $7 billion through ESG (Environmental, Social, and Governance) and green bonds in 2021. The majority of green bonds issued by Indian issuers are traded on markets outside of India since issuers find it more lucrative to list their securities there. A consistent and reliable method of defining what is ‘green’ has been one of the major obstacles to continued expansion, according to the regulator, which released a consultation paper in November. Lack of transparency results in “greenwashing.”
A public offering of debt instruments or non-convertible redeemable preference shares must be kept open for at least three and at most 10 working days, per SEBI. The issuer would extend the bidding or the issue period specified in the offer document for a minimum of three working days in the event of a modification to the price band or yield. According to the regulations, an issuer issuing non-convertible securities has the option to recall those securities at any time up to 21 days prior to the day on which the option might be used.