Empirical Evidence on Announcement Effect : The Case of Green Bond Offerings by Indian Companies

Authors

  •   Priyanka Zala Assistant Professor, Faculty of Business Administration – NRBBA, GLS University, Ahmedabad - 380 006, Gujarat
  •   Rajalakshmi Vel Assistant Professor, School of Management, Vel Tech Rangarajan Dr. Sagunthala R & D Institute of Science and Technology, Vel Nagar, Avadi, Chennai - 600 062

DOI:

https://doi.org/10.17010/ijrcm/2020/v7i1/153630

Keywords:

FPO

, IPO, IPO price, listing price, listing gain (loss), primary equities market, public issues, rights issue, SEBI, SME

JEL Classification

, G11, G15, M10, N25

Paper Submission Date

, August 2, 2020, Paper sent back for Revision, August 6, Paper Acceptance Date, August 10, 2020.

Abstract

The economy of tomorrow is dependent on the adoption of sustainable practices today. The global community is rapidly adopting to climate change needs. India is ambitious and active in climate action goals. With an estimated annual requirement of $ 960 billion for sustainable development goals (SDGs), mobilizing low-cost, long-term capital remains top priority for India. The implementation of sustainable development objectives requires judicious designing and delivering of financial products and practices by the Indian financial system. On the product front, green bonds have emerged as a suitable financing instrument for mobilizing capital for a range of environmental projects. The announcements of green bonds issues generate interesting stock performances, which are indicators of investor appreciation of sustainable development decisions of the issuing companies. The paper examined the stock market reaction to green bond offerings. In a nutshell, the paper focused on the announcement effect of green bonds offered by public and private enterprises from India through the period from 2015–2019. The study classified the green bonds based on certification. The findings showed positive abnormal returns for more than 80% of the sample of certified green bonds during the event window. The results of the study indicated that the stock market reacted positively to certified green bond announcements and negatively for few non-certified issues.

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Published

2020-03-31

How to Cite

Zala, P., & Vel, R. (2020). Empirical Evidence on Announcement Effect : The Case of Green Bond Offerings by Indian Companies. Indian Journal of Research in Capital Markets, 7(1), 38–47. https://doi.org/10.17010/ijrcm/2020/v7i1/153630

Issue

Volume 7, Issue 1, January-March 2020

Section

Articles
Crossref
Scopus
Google Scholar
Europe PMC

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