E-investing
Institutional investors, who always focussed on G (governance), are now increasingly engaging with investee companies on the E (environment) and the S (social) part
Illustration by Siddhant Jumde
In March, Hero Future Energies, the renewable energy venture of the Hero Group, received an overwhelming response for its overseas green bonds with investors pouring in over $3 billion for expansion of its renewable energy portfolio abroad as well as in domestic market. The six-year maturity money was raised from insurers and institutional funds at a coupon rate of 4.25 per cent.
Another renewable energy company, Hyderabad-based Gre- enko Energy Holdings, mobilised close to a billion dollars through green bonds for refinancing its debt. Though renewable players are finding acceptance amongst global investors, Indian issuers are a bit slow in tapping the huge global pool of green investors.
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ESG or environmental, social and governance-linked investment has been one of the biggest recent developments in the world of investment. While the trend is quite old in the west, in India, it’s catching up fast now.
Over the past two years, we have seen investors making a concerted effort to hold companies accountable for corporate governance miscarriages and their impact on the society and environment. It is in this spirit that Sebi recently took the bold step to mandate companies to make more comprehensive disclosures on ESG-related metrics.