NABKISAN Finance Ltd, a subsidiary of the National Bank for Agriculture and Rural Development (NABARD), has raised Rs 180 crore through a social bond dedicated exclusively to the water, sanitation and hygiene (WASH) sector.
The bond was listed on the National Stock Exchange (NSE) in Mumbai on October 1, according to the Press Information Bureau (PIB). The issue was oversubscribed 1.8 times, indicating that investor bids exceeded the amount being raised.
The five-year bond carries a coupon rate of 8.10% and will mature in September 2031. It has been assigned CRISIL AAA (Stable) and CARE AAA (Stable) ratings.
But what is a WASH social bond, and how will the Rs 180 crore raised through it be used?
What is a WASH social bond?
A social bond is a debt instrument through which funds are raised for projects intended to address a specific social issue. In this case, NABKISAN’s bond is dedicated to WASH – water, sanitation and hygiene.
The proceeds from the issue will be deployed to expand access to safe water, sanitation and hygiene solutions across rural and underserved communities, the PIB said.
The government said the financing is intended to contribute to improved health, livelihoods and quality of life in these communities.
The bond links the money raised from investors to a defined social-development purpose rather than leaving the proceeds for general use.
How much has NABKISAN raised?
NABKISAN has raised Rs 180 crore through the issue. The bond received bids equivalent to 1.8 times the amount being raised, according to the PIB release. It carries an annual coupon rate of 8.10% and has a five-year tenure, with maturity scheduled for September 2031.
The issue has also received the highest domestic credit rating from both CRISIL and CARE, with both agencies assigning an AAA (Stable) rating.
Where will the Rs 180 crore go?
The proceeds will be used for WASH-related solutions in rural and underserved communities. According to the PIB, the funds will support efforts to expand access to safe water, sanitation and hygiene solutions.
The government said these interventions are intended to contribute to better health, livelihoods and quality of life in the communities covered by the financing.
Currently, the PIB release does not provide a project-wise breakup of the Rs 180 crore or specify the number of villages or beneficiaries that will receive funding.
Why is rural India the focus?
NABKISAN is a subsidiary of NABARD, the country’s development finance institution focused on agriculture and rural development. The WASH bond is specifically targeted at rural and underserved communities.
NABARD Chairman Shaji Krishnan V said improved access to water and sanitation strengthens health, livelihoods and quality of life in rural areas.
He also said development institutions have a role in making such projects bankable and attracting wider participation from commercial and capital markets.
This is the financing structure behind the bond: capital is raised from investors through the bond market, while the proceeds are earmarked for projects serving a defined social purpose.
Why does the bond matter for financing WASH projects?
The issue provides a capital-market route for financing WASH-related projects. NABKISAN Managing Director and CEO Immanuvel Ganesan said the WASH bond demonstrates how capital-market instruments can mobilise resources for development sectors while delivering measurable social impact.
The bond’s listing on the NSE gives investors a market-listed debt instrument, while the use of proceeds remains linked to WASH projects in rural and underserved areas.
What does ‘social bond’ mean for investors?
The defining feature of the instrument is the specified use of the money raised. Instead of raising funds without a stated sectoral purpose, the NABKISAN issue is dedicated to WASH-related solutions.
For investors, the bond carries a defined coupon and maturity. For the issuer, the Rs 180 crore provides financing that is earmarked for projects serving rural and underserved communities.
The AAA ratings assigned by CRISIL and CARE indicate the credit assessment given to the bond by the two rating agencies.
What role did Water.org play?
Water.org was involved as the technical adviser and knowledge partner for the transaction.
The PIB said the issuance was supported by a wider group of market institutions, advisers, trustees and arrangers.
Representatives from NABARD, NABKISAN, Water.org, Trust Group and NSE participated in the listing ceremony in Mumbai.
What does the issue mean for India’s sustainable-finance market?
The NABKISAN issue adds a WASH-focused instrument to India’s sustainable-finance market. The report described the listing as part of NABARD and NABKISAN’s efforts to develop innovative financing solutions for sustainable and inclusive rural development.
The government also said the transaction would contribute to deepening India’s sustainable-finance market by linking capital-market financing with social and developmental requirements.