HDFC, SBI Life take 18.5% stake in IDFC Infra Debt Fund

Refinancing firm to raise Rs 1,000 cr via bonds

Housing Finance Development Corporation (HDFC) and SBI Life Insurance have together taken an 18.5% stake in IDFC Infra Debt Fund, an infrastructure refinancing unit of IDFC.

IDFC Infra plans to raise up to Rs 1,000 crore through non-convertible debentures (NCDs), to provide refinancing support to operating infrastructure projects. It also plans to raise short-term funds of Rs 200 crore through commercial paper.

ICRA has assigned an 'AAA' rating with a stable outlook to Rs 1,000 crore of NCDs and 'A1+' to the commercial paper programme.

IDFC Infra was set up in March 2014 by IDFC, under a non-banking finance company structure. The equity share capital of Rs 440 crore is held by IDFC through its step-down entity, IDFC Financial Holding Company Ltd.

The IDFC stake is now about 81.5%, after the recent development. The company got additional equity of Rs 100 crore from HDFC (11.1%) and SBI Life Insurance (7.4%) resulting into part-dilution of the stake of IDFC FHC, according to ICRA.

IDFC further plans to dilute its holding to 49% by November 2017, to meet the regulatory norms.

IDFC Infra had a loan book of Rs 1,202 crore at end-March. it reported net profit of Rs 37.1 crore on a total income of Rs 75 crore in FY16.

In the current loan portfolio, renewable energy has the highest share of about 40%. Followed by information technology parks and special economic zones at 21% and roads at 13%. The road sector projects are public-private partnership ones, tripartite agreements involving financier, road operator and project authority. The balance exposure is to projects without tripartite agreements.

Since the exposures are post a minimum one year of satisfactory operation since the commercial operation date, the credit risk is relatively lower as compared to under-construction projects, says ICRA.

It draws comfort from the company's strong risk management systems and cautious stance in funding power projects only in the renewable energy and transmission segments.