India’s infrastructure bank to start disbursing loans in FY23

MUMBAI, Nov 2 (Reuters) – India’s National Infrastructure Development Finance Bank, a development finance institution, may start disbursing loans from the current financial year, the chief executive and chief executive said on Wednesday. General Rajkiran Rai G.

Rai said the institution was also looking to raise funds by issuing longer-term 10- to 25-year bonds in the domestic market this fiscal year, but gave no quantum or timeline.

There is no immediate pressure to raise funds and the agency is well capitalized with an initial capital of 200 billion rupees ($2.42 billion) and grants of 50 billion rupees, Rai said.

The National Infrastructure Development Finance Bank expects ratings for its bond issues by December.

He said the agency expects a strong appetite for long-term bonds, especially from pension funds and insurance companies, adding that these investors are looking to invest in long-term bonds. to the tune of 2.5 trillion rupees ($30.22 billion) next year.

The public finance agency will ensure that risk pricing is done correctly on its bonds, as investors will need to be rewarded for taking longer-term risk, Rai said. The agency will create its own benchmark for pricing its bonds.

Rai did not give any funding target as the agency is still in the process of crystallizing its business plan and evaluating the pipeline of projects.

The Indian government had announced the development of this financial institution in its February 2021 budget to finance infrastructure projects of national importance. Rai was named MD in August, and the agency is currently building a team.

The agency seeks to finance greenfield and brownfield projects and also works with NIIF Infrastructure Finance on certain projects.

($1 = 82.7140 Indian rupees)

Reporting by Bhakti Tambe; Editing by Josie Kao

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