IS THERE A “GREENIUM” IN INDIAN CAPITAL MARKETS? AN EMPIRICAL ANALYSIS OF SOVEREIGN AND CORPORATE GREEN BOND PRICING

Abstract

Green bonds are issued to finance projects with environmental benefits. A central pricing question is whether they carry a lower yield than comparable conventional bonds—the differential known as the greenium. India offers a useful setting because it has two distinct segments: sovereign green bonds auctioned by the Reserve Bank of India since January 2023, and corporate green bonds issued under SEBI’s disclosure framework. This study examines whether a significant greenium exists in Indian capital markets and whether sovereign and corporate greeniums differ.

Greenium is defined as conventional yield minus green yield, in basis points. Sovereign data consist of eleven completed auctions (January 2023–February 2025) paired with same-tenor government securities and are tested with parametric, non-parametric, bootstrap,  time-pattern and sensitivity methods. Corporate evidence is screened from published matched-pair studies against the same rule. The paper finds a small positive sovereign greenium that declines over time, directionally consistent but unverified corporate magnitudes, and an indicative rather than confirmatory comparison between segments.