L&T Likely to Roll-Out Another ESG Bonds Issue After Stellar Debut

Larsen and Toubro (L&T) might raise funds via environmental, social and governance (ESG) bonds again. This comes just weeks after L&T issued ESG notes that were sold at a premium, Reuters reported. The construction giant became the first Indian corporate to raise funds via ESG under the Securities and Exchange Board of India’s (SEBI) newly introduced ESG and sustainability-linked bond framework. 

“We remain open to raising more funds through ESG-linked issuances...,” Reuters reported, citing an L&T spokesperson. “Should the need arise, and if market conditions are conducive, we may consider the ESG debt market again,” the spokesperson added. 

Earlier on Tuesday, L&T said it has bagged land in Gujarat’s Kandla for the development of green hydrogen and green ammonia projects.

L&T raised Rs 500 crore via ESG bond issue transaction. HSBC acted as the sole lead arranger in this deal. The construction giant had said that as a part of the ESG bond deal, it is committed to environmental goals, including a decrease in the intensity of freshwater withdrawal and emissions of greenhouse gases. These goals align with the company’s long-term sustainability goals of achieving water neutrality by 2035 and carbon neutrality by 2040. 

“We take pride in leading the transition to sustainable finance under SEBI’s new ESG framework. This bond issuance reinforces our steadfast commitment to sustainable development and responsible business practices while aligning our finances with environmental targets,” an L&T had said while commenting on the development, according to the Mint. 

The issuance followed SEBI’s regulatory framework announced earlier this month, which is designed to promote transparency, accountability, and alignment with international ESG standards. SEBI’s framework outlines crucial requirements for issuers like the disclosure of sustainability objectives, mandatory external assessments such as second party opinions, and post-issuance reporting. The regulatory framework makes it compulsory to report performance indicators and targets to measure ESG outcomes.