Indian companies are set to set a record in raising funds with the ESG (Environmental, Social and Governance) tag this year, as banks are on the bandwagon before the Reserve Bank of India (RBI) to come up with its own guidelines on ESG compliance. have joined. With regulatory push accelerating after Prime Minister Narendra Modi announced India’s ambition to be a carbon-free nation, bankers expect such foreign bond sales to go up to $10 billion this year and more in 2022. may increase.

including companies

, JSW Hydro Energy, axis Bank. Is.

“This year the level of ESG fundraising in India will hit a record high,” said Jayesh Mehta, India Country Treasurer, Bank of America. “Global investors are looking for green opportunities for fund deployment in India as the country has huge potential, especially in the renewable energy sector.”

He said that with large conglomerates entering the clean energy sector with international private equity investors, India will forge a new path in the production of clean energy.

Any funds raised with the ESG tag should be deployed in dedicated pockets to stay in line with the benchmark which minimizes the funding cost for the borrowers.

Pramod Kumar, head of investment banking at Barclays Bank India, said, “Investors seek to differentiate themselves by supporting companies that focus on pursuing the ESG agenda honestly.”

“They have the specific goal of deploying a certain proportion of their funds in ESG-compliant companies…”

The issuance of ESGs will accelerate in the coming years, “which is positive for society, the investment community and the industry”, he said.

If both offshore bonds and loans are considered, the amount raised this year has again set a new record of around $9.7 billion, according to market estimates.

UltraTech Cement raised $400 million in February through sustainability linked bonds. The move was interesting as cement companies are traditionally billed as emitters of pollutants.