Green Finance: India’s YES bank signs MoU with London Stock Exchange group

Green finance

  • YES BANK aims to list up to $500m Green Bond on London Stock Exchange in 2016
  • YES BANK to potentially raise equity capital through global depository receipt listing basis market conditions
  • Collaboration confirms London’s position as leading international green finance centre

Yesterday, YES BANK, India’s fifth largest private bank, today formalised the Memorandum of Understanding signed with The London Stock Exchange during Prime Minister Narendra Modi’s UK visit in November 2015, to develop bond and equity issuance, with particular focus on the relatively untapped sector of Green Infrastructure Finance.

YES BANK was the first issuer of the Green Infrastructure Bonds in India. As a catalyst for Green Infrastructure finance, allowing investors to facilitate funding towards renewable and clean projects in India, YES BANK is also the first Indian Bank to have made a commitment to funding 5000 MW of renewable energy.

As part of the agreement with LSEG, YES BANK confirmed that it plans to list a Green Bond of up to $500m 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 $1bn of equity capital raising plans, basis market conditions.

The agreement, signed by Mr. Rana Kapoor, Founder, Managing Director & CEO of YES BANK and Nikhil Rathi, CEO, LSE Plc will help strengthen the increasingly vibrant economic and financial ties between the UK and India.

Given the Indian Government’s focus on renewable energy with a target of 175 GW of additional capacity installation by 2022, it is estimated that the renewable energy sector will require significant and structured financing. At the moment, sector limits, high street interest rates and asset-liability mismatch are the main challenges faced by the existing financing mechanisms. Therefore, a need for innovative financing mechanisms to finance projects in renewable energy and energy efficiency space has risen.

Speaking about the collaboration, Rana Kapoor, Founder, Managing Director & CEO, YES BANK said: Following the historic visit of Prime Minister Narendra Modi to the UK, the YES BANK – LSEG strategic MoU presents an incredible opportunity to create mutually beneficial partnerships. 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’.”

Nikhil Rathi, CEO, London Stock Exchange plc & Director of International Development, LSEG said: “London is the world’s most international financial market and has a long history working with partners in India. London Stock Exchange is a natural partner for YES BANK for their significant debt and equity issuances and as a partner for their clients. YES BANK is a leader in sustainable finance in India. Today we are honoured to welcome Mr. Rana Kapoor and his team from YES BANK to sign this important MoU which demonstrates our commitment to supporting the raising of green capital for India.”