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Awards / Treasury & Capital Markets
Country Awards for Sustainable Finance: Year like no other for South Asia capital markets
Embracing sustainable finance amid turmoil, uncertainty
The Asset 10 Jan 2023

For many capital market practitioners who have witnessed several business cycles and market downturns, 2022 is a year like no other. “This is the most difficult in my more than 25-year banking career,” says a senior banker based in Hong Kong, a sentiment echoed by many of his peers across the region. “This year is more challenging compared with the Asian financial crisis in 1997 and the global financial crisis in 2008,” adds another senior banker.

Indeed, issuance volumes across G3 bond and equity in Asia are down significantly this year on the back of a broader geopolitical and economic uncertainty. This was exacerbated by the rising interest rates, higher inflation and surging commodity prices. China’s economy, the world’s second largest, slowed down as it implemented a restrictive zero-Covid strategy and suffered from depressed real estate activity and weak sentiment in the housing sector.

The tough market environment was evident in South Asia as the board of editors at The Asset reviewed capital market activity in the region as part of the evaluation process for The Triple A Country Awards 2022 for Sustainable Finance.

The total G3 bond issuance in South Asia in the first 11 months of the year fell 65.3% to US$7.79 billion from only eight deals compared with US$22.48 billion from 38 offerings in the corresponding period of 2021. According to Refinitiv, issuances out of India plunged 62.2% to US$6.79 billion from US$17.97 billion, while those from Pakistan plummeted 75% to US$1 billion with just one deal, down from US$4.02 billion from three transactions during the same period.

In hindsight, a number of Indian issuers were able to time the market right when they priced their deals in January before the market volatility set in, which was escalated by the Russian invasion of Ukraine.

In terms of equity capital market (ECM) transactions, the total proceeds out of India also declined sharply to US$17.19 billion during January-November 2022, compared with US$32.73 billion in the same period a year ago, with those from initial public offerings falling to just half of the volume to US$7 billion from US$14.92 billion during January-November 2021. There were also ECM deals out of Bangladesh, Pakistan, Nepal and Sri Lanka, but their volumes, based on Refinitiv figures, were small.

“It’s been a tough market just like elsewhere in the region,” notes a senior banker from a European bank covering India. “There was a withdrawal in terms of foreign investor willingness to participate in new transactions, although follow-ons and block trades continued to get done.”

What’s been sustaining ECM activity and supporting the market for most of the year has been the strength of the domestic flows, with Indian retail investors putting money into domestic funds.

And recently, what has been heartening is the inflow of foreign money back to India as witnessed in November. “To see the foreign investors coming back is very encouraging and giving an added push to the Indian market,” the senior banker points out.

This comes as foreign investors are looking for alternative markets for China. The banker explains: “With what is happening in China and with the US-China issues bearing down quite significantly, those played partly in India’s favour. If you look at Asia, ex-Japan, as one pool of emerging markets, a lot of the other markets in the region do not have the liquidity, the depth and choices that the Indian market offers.”

Amid the challenging market environment, the banks and the issuers/borrowers continue to persevere in accessing the capital markets to raise funds, taking advantage of any issuance window that opened during the year to tap the available pools of liquidity. And in doing so, a number of Indian corporates are embracing sustainable financing in meeting their funding requirements.

The Housing Development Finance Corporation, which printed a US$1.1 billion syndicated social loan facility in August 2022, is voted as the best issuer for sustainable finance in India. The facility was the world’s largest social loan at the time of issuance, with the proceeds allocated to financing affordable housing in the country. It was also the first social external commercial borrowing (ECB) loan out of India and the largest ECB loan deal from a housing finance company.

Among banks, Citi is chosen as the best bank for sustainable finance in India. Its environmental, social and governance (ESG) activities extend to the bank’s own footprint and community efforts through corporate social responsibility as well as through its businesses for clients. Its financial inclusion business initiatives include funding commitments to individual farmers, micro, small and medium enterprises, and sectors like healthcare, affordable housing and renewable energy.

In terms of deals, the US$4 billion triple-tranche bond offering by Reliance Industries was among those that stood out in India in 2022. This was the largest-ever issuance by an Indian issuer, and the first-ever triple-tranche US dollar offering and first 40-year deal from India. It achieved the lowest-ever coupon for a 30-year tenor and the lowest-ever re-offer spread on a 10-year bond from an Indian issuer.

In Bangladesh, Standard Chartered is voted as the best bank for sustainable finance as it took major steps towards accelerating its ESG initiatives by introducing the first carbon-neutral smart card in the market, arranging the first green loan and first green zero-coupon bond in 2021, and pioneering the country’s first-ever sustainable trade finance transaction.

For the complete list of best banks and advisers in South Asia, please click here.

For the complete list of best deals in South Asia, please click here.

For more information about the awards gala please contact us at


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