YES Bank plans to list $500 mn green bonds on London Stock Exchange

Private sector lender YES Bank aims to list up to $500 million green bonds on London Stock Exchange by December and has tied up with the UK's exchange group on debt and equity issuance.

It has also formalised the memorandum of understanding (MoU) signed with the London Stock Exchange (LSE) during Prime Minister Narendra Modi's visit to the UK in November to develop bond and equity issuance, with particular focus on the relatively untapped sector of green infrastructure finance. The lender in a statement on Tuesday said it plans to list a green bond of up to $500 million on London Stock Exchange by December 2016.

YES Bank will also evaluate the possibility of raising further capital in London, potentially through the listing of Global Depository Receipts (GDR) as part of its overall $1 billion of equity capital raising plans, basis market conditions. "The MoU will help strengthen the increasingly vibrant economic and financial ties between the UK and India," it said. The MoU was signed by YES Bank Managing Director and Chief Executive Officer Rana Kapoor and Nikhil Rathi, CEO of LSE Plc at the stock exchange's opening bell ringing ceremony.

"YES Bank was the first issuer of the green infrastructure bonds in India," it said. "As part of catalysing green infrastructure finance in India, allowing investors to facilitate funding for renewable and clean projects, it is also the first bank to commit fund for 5,000 MW of renewable energy," YES Bank added. "YES Bank will strive to improve the access to long-term overseas funds for corporations in India, through capital markets in the UK particularly towards Green Infrastructure Financing, which is high on India's agenda. We also look forward to working with LSE in establishing London as the leading instrument for raising rupee denominated offshore capital via masala bonds," Kapoor said.

Masala bonds are Indian rupee denominated bonds issued in offshore capital markets. The government has envisaged a target of 175 gigawatt of additional renewable energy capacity installation by 2022. It is estimated that the renewable energy sector will require significant and structured financing in the country.