Sagarmala Finance Corporation Ltd (SMFCL), India’s first dedicated maritime non-banking financial company (NBFC) and a Mini Ratna Category-I public sector enterprise under the Ministry of Ports, Shipping and Waterways, on Monday withdrew India’s first blue bond issuance of Rs 600 crore as investors sought a higher coupon than the lender was willing to offer.
The lender was looking to price its 10-year bonds below 8%, but received bids at a coupon higher than expected, ranging from 7.69% to 8.44%. SMFCL received bids worth Rs 525 crore across 26 bids for its proposed bond issue.
Managing Director L.V.S. Sudhakar Babu confirmed that while the company had expected to price the 10-year paper below 8%, it received bids at a coupon that was higher than expected.
The withdrawal came alongside a similar move by the Small Industries Development Bank of India (Sidbi), which last week also called off its Rs 6,000 crore bond issuance, as two government-backed Indian firms together pulled the plug on raising a combined Rs 6,600 crore through rupee bonds. Borrowing costs are rising as the Reserve Bank of India (RBI) is expected to raise rates later this year to contain oil price-driven inflation, with the RBI also reducing liquidity in the banking system to prevent cheap loans from fuelling cost pressures after a special programme to support the rupee netted $133 billion in diaspora deposits.
The proposed blue bond, which carried an AA+ rating from ICRA and CARE with SBI Capital Markets as arranger, had been intended to raise funds for maritime sector lending, greenfield port projects and coastal road networks, among other purposes, to be utilised within the current financial year.
Sagarmala Finance Corporation was inaugurated in June 2025 as India’s first NBFC in the maritime sector by Union Minister for Ports, Shipping and Waterways Sarbananda Sonowal, aligned with the Maritime Amrit Kaal Vision 2047 and aimed at bridging financing gaps for ports, MSMEs, startups and institutions in the sector. The company holds an overall borrowing limit of Rs 25,000 crore approved by its board, with Rs 8,000 crore earmarked for its first financial year of operations.
Separately, Vadodara Municipal Corporation, an urban local body in Gujarat, continues to plan its own blue bond issue of around Rs 200 crore.
