TestCloud
Prep • Practice • Perform
Log In

L&T Launches India’s First ESG Bond Worth ₹500 Crore Under SEBI’s New Green Finance Framework.

Economy Business | Dated: 25 Jun 2025

On 23 June 2025, Larsen & Toubro (L&T) became the first Indian company to list Environmental, Social, and Governance (ESG) bonds on the National Stock Exchange (NSE). This ₹500 crore offering is issued under SEBI’s new ESG and sustainability-linked bond framework and marks a major milestone in India’s green finance journey.

🎯 Key Highlights:

  • - L&T, a Mumbai-based engineering and infrastructure conglomerate, made history by listing India’s first ESG-compliant bond on the National Stock Exchange (NSE). The bond is structured as Non-Convertible Debentures (NCDs), raising ₹500 crore with a fixed annual coupon rate of 6.35%. It aims to channel capital toward sustainable development.
  • - These bonds are the first to be issued under the Securities and Exchange Board of India (SEBI)’s newly introduced ESG and sustainability-linked bond framework, which came into effect on 5 June 2025. This framework sets guidelines for ESG-related financial instruments to align with India's climate and sustainability goals.
  • - The NCDs have a maturity period of 3 years, with the final redemption due on 19 June 2028. Investors will receive annual interest payments. The issuance structure ensures transparency and investor confidence, especially for ESG-conscious institutional buyers.

💡 Other Important Facts:

  • (i) The entire transaction was executed with Hong Kong and Shanghai Banking Corporation Limited (HSBC) as the sole lead arranger. HSBC’s global expertise in ESG finance ensured adherence to international benchmarks and attracted foreign interest in India’s sustainable finance ecosystem.
  • (ii) L&T has linked the bond to measurable ESG performance targets under SEBI’s guidelines. These include a reduction in freshwater withdrawal intensity and a cut in greenhouse gas (GHG) emissions. These sustainability-linked goals are aligned with L&T’s vision of becoming water neutral by 2035 and carbon neutral by 2040.
  • (iii) As per SEBI’s sustainability-linked bond framework, L&T must publish detailed disclosures, including sustainability objectives, Second-Party Opinions (SPOs), and Key Performance Indicators (KPIs). The company will also submit post-issuance impact reports, making this a transparent and benchmark-setting green finance initiative.

📚 Test Your Knowledge:

Which Indian company recently became the first to list ESG bonds worth ₹500 crore on the National Stock Exchange (NSE)?

Correct Answer: Larsen & Toubro (L&T)

🚀 Quick Recap:

About Larsen & Toubro (L&T) Limited

  • Chairman & Managing Director (CMD) : Sekharipuram Narayanan (SN) Subrahmanyan
  • Headquarter : Mumbai