India's maritime lender set to launch country's first blue bond, top exec says
May 29 (Reuters) - India's Sagarmala Finance Corporation is set to issue the country's first 'blue bond', as it looks to diversify funding sources to lend towards developing maritime and coastal infrastructure, a top executive told Reuters on Friday.
A blue bond is a debt security aimed at raising funds for ocean- and water-related projects, targeting investors that have a mandate to invest in bonds that have an environmental focus. While 'green bonds' used to fund climate change-related projects have seen a considerable pick-up, Sagarmala's debt would be a first-of-its-kind blue bond in India.
Globally, just over $15 billion in blue bonds had been issued by mid-2025, according to World Bank data, opens new tab. In 2020, the Bank of China had issued Asia's first blue bond, while some island nations like Seychelles have also raised debt via such securities.
Sagarmala, India's state-owned maritime-focused lender, plans to raise up to 10 billion rupees ($105.08 million), including a greenshoe option of 5 billion rupees, Managing Director L.V.S. Sudhakar Babu told Reuters.
While the exact tenor and rate are yet to be decided, the company plans to use the bond issue for longer term borrowing. Sagarmala's existing term loans have an average tenor of 3.5 years, while the average tenor of loans it disburses is about 12 years, creating an asset-liability mismatch, Babu said.
Trust Capital, AK Capital and Tipsons have been appointed as advisers to the bond issue, for which a date is yet to be finalized.
"This will happen when the market is conducive and yields stabilise," Babu said.
India's benchmark 10-year yield has risen around 35 basis points since the start of the U.S.-Iran war, denting activity in the bond market.
Established in 2016 under India's Ministry of Ports, Shipping and Waterways, Sagarmala received a non-banking financial company licence in June 2025.
Reuters had earlier reported that Sagarmala plans to raise as much as 100 billion rupees in financial year 2027 to finance projects that strengthen India's maritime ecosystem, including greenfield and brownfield ports, last-mile port connectivity, shipbuilding, inland waterways and coastal road networks.
The company also administers the government's 250-billion-rupee Maritime Development Fund, which includes a 50-billion-rupee Interest Incentivisation Fund, allowing it to provide interest subsidies to borrowers.
Sagarmala is also seeking a 20-billion-rupee equity infusion from the government to maintain a healthy debt-to-equity ratio as it expands its loan book.
