India’s First Blue Bond Is Coming: Who’s Raising ₹1,200 Crore And Why

India is set to enter the global blue bond market, with a state-owned maritime financier and a municipal corporation preparing to tap the emerging debt segment before the end of September.

Sagarmala Finance Corp, a government-owned lender focused on the maritime sector, and Vadodara Municipal Corp are considering blue bond issues, according to a company official and two merchant bankers.

Blue bonds are debt instruments used to finance projects linked to oceans, water management and other marine or water-related environmental objectives.

They are aimed at investors seeking assets that support environmental sustainability.

Globally, more than $15 billion worth of blue bonds had been issued by mid-2025, according to the World Bank.

Sagarmala Finance Eyes ₹1,000 Crore Issue

Sagarmala Finance Corp could become one of India's first blue bond issuers, with the lender considering a fundraising of up to ₹1,000 crore ($104.5 million).

Managing Director L.V.S. Sudhakar Babu told Reuters that the company could tentatively target the last week of September for the issue.

The financial institution focuses on funding projects aimed at strengthening India's maritime infrastructure and ecosystem. Its areas of financing include last-mile port connectivity, shipbuilding, inland waterways and coastal road networks.

The proposed bond sale would give the state-owned lender access to a specialised pool of investors seeking environmentally focused debt instruments while supporting projects connected to India's maritime infrastructure.

Vadodara Plans ₹200 Crore Blue Bond

Vadodara Municipal Corp is separately seeking approvals for a proposed ₹200 crore blue bond issue, according to two merchant bankers familiar with the plans.

The civic body, located in Gujarat, is awaiting the necessary clearances before proceeding with the issue.

India Ratings has assigned an AA+ rating to the proposed Vadodara bonds. The proceeds are expected to finance capital expenditure for a pump house, water treatment plant and clear water reservoir.

The proposed issue would mark an important step for India's municipal debt market by linking local infrastructure financing with the growing market for environmentally focused bonds.

India's Blue Bond Market Takes Shape

The potential issues come as India's broader municipal bond market enters a period of expansion.

A large investor expects the country's municipal bond market to at least double to $1 billion by the end of the financial year.

Rajkiran Rai, Managing Director at the National Bank for Financing Infrastructure and Development, expects fresh municipal bond issuance of at least ₹5,000 crore through March.

Over the past nine years, 22 cities across seven states have raised around ₹4,500 crore through municipal bonds. Of this, approximately ₹1,750 crore was raised during the last financial year.

The proposed blue bond sales by Sagarmala Finance and Vadodara could therefore provide a new avenue for India's infrastructure financing while helping deepen the country's relatively young sustainable debt market.