Lotus Petal opens first SSE bond issue since CSR rule change
AI Summary
Lotus Petal Foundation has launched its ₹1 crore Zero Coupon Zero Principal bond issue on the BSE Social Stock Exchange, marking the first such offering since the government allowed these instruments to count towards corporate social responsibility (CSR) obligations. The issue has already seen 12% subscription on its opening day, with GTPL Hathway Ltd. committing to subscribe up to 15% through its CSR allocation, reflecting growing corporate confidence in the Social Stock Exchange as a means for social impact investment.
Gurugram-based non-profit Lotus Petal Foundation (LPF) on Monday opened its ₹1 crore Zero Coupon Zero Principal (ZCZP) bond issue on the BSE Social Stock Exchange (SSE), the first such issue after the government allowed eligible subscriptions to these instruments to count towards corporate social responsibility (CSR) obligations.
The issue, which closes on July 31, has already garnered subscriptions for about 12 per cent of the issue size on the opening day. GTPL Hathway Ltd., a long-standing CSR partner of the foundation, has committed to subscribe to up to 15 per cent of the issue through its CSR allocation.
“GTPL Hathway Ltd., a valued CSR partner of Lotus Petal Foundation for the past seven years, has committed to subscribe to up to 15 percent of the issue through its CSR allocation,” Kushal Raj Chakravorty, Founder and Managing Trustee of Lotus Petal Foundation said.
“We believe this reflects growing confidence among corporates in the Social Stock Exchange as a transparent and credible avenue for creating measurable social impact,” Chakravorty said.
The issue comes soon after the Centre permitted companies to deploy up to 10 per cent of their annual CSR expenditure through subscriptions to eligible ZCZP instruments listed on social stock exchanges, creating a new fundraising avenue for registered non-profit organisations.
The foundation aims to raise ₹1 crore through the issue, with a minimum investment of ₹1,000. The proceeds will fund one year of education for 160 students studying in classes 3 and 5 at Lotus Petal Senior Secondary School in Dhunela, Gurugram. The funding will cover tuition, books, uniforms, stationery, transport, digital learning, and breakfast and lunch.
Founded in 2011, Lotus Petal Foundation works in education, nutrition and livelihood development. It operates a CBSE-affiliated school with around 1,200 students, runs a digital learning platform reaching more than 12,000 students, undertakes government school transformation projects and provides STEM scholarships to underprivileged students.
Unlike conventional bonds, ZCZP instruments do not pay interest or return principal. Instead, investors make philanthropic contributions towards specified social projects while issuers are required to disclose audited fund utilisation and impact reports under the Social Stock Exchange framework.
Over the past 15 years, the foundation has mobilised an estimated ₹180-200 crore through corporate CSR funding, individual donations and overseas contributions. It plans to expand its school campus and significantly scale up its digital learning platform over the coming years
Original Article
Published on Hindu BusinessLine