Since January 2023, the Indian government has successfully auctioned sovereign green bonds (SGrBs) worth ~INR 50,200 crore with 5-, 10-, and 30-year tenures over two calendar years. This recent INR 5,000 crore auction attracted bids totalling INR 15,160 crore. Two additional SGrB auctions, each worth INR 5,000 crore, with 10- and 30-year tenures, are planned for the final quarter of FY25.
In November 2024, the RBI included 10-year SGrBs under the Fully Accessible Route (FAR) for H2 FY25. However, the previous 10-year SGrB issuance in November 2024 saw limited investor interest, attracting bids for less than a third of the INR 5,000 crore offered. Will the RBI extend the FAR to longer-tenure SGrBs, and how might market participants perceive future SGrB auctions under such circumstances?