GuarantCo provided a partial (65 per cent) guarantee for an INR 1.5 billion (c. USD 17 million) listed green bond issuance by Muthoot Capital Services Limited (MCSL), one of India’s leading publicly listed non-bank financial institutions.

GuarantCo’s guarantee enabled a three-notch upgrade to MCSL’s debut green bond to AA+ (CE) by CRISIL, India’s leading rating agency. The bonds were exclusively listed on the National Stock Exchange (NSE).

This transaction will not only help MCSL diversify its funding sources away from commercial banks to include institutional investors but also enables the company to tap into longer-tenor liquidity of six years.

The proceeds of the bond will be used by MCSL to provide loans to consumers, primarily from rural locations, for the purchase of electric two-wheelers, thereby fostering the growth of the Electric Vehicle (EV) ecosystem beyond India’s metro cities.

The transaction is expected to support around 57,000 end users in purchasing an EV, with almost 23,000 expected to be women. These end users are predominantly from rural areas and have historically been underserved. Indeed, 50 per cent are expected to be accessing credit for the first time.

By enabling the growth of the EV sector in India, this transaction will contribute to a reduction of greenhouse gas emissions and local air pollutants, in alignment with the UN’s Sustainable Development Goal 13 – Climate Action. It will also contribute to reducing the adverse per capita impact of cities and communities, aligned with Sustainable Development Goal 11 – Sustainable Cities and Communities.