India Infradebt to raise Rs 500 cr via debentures

India Infradebt Ltd is raising Rs 500 crore through debenture issue. India Infradebt is the infrastructure debt fund (IDF) in the non-banking financial company route. This IDF is jointly promoted by ICICI Bank, Bank of Baroda, Life Insurance Corporation of India and Citicorp Finance (India). Rating agency CRISIL has assigned AAA/Stable rating to the Rs 500 crore debt issue.

Pawan Agrawal, senior director, CRISIL Ratings, said, “IDF-NBFCs will also facilitate the development of the bond market by providing a good investment opportunity for long-term bond investors in high-quality paper, aligned with their risk appetite and time horizon.”

As the concept of IDF-NBFCs is at a nascent stage, Infradebt could face operational risks relating to scale-up of business, and legal risks associated with the tripartite agreement, Crisil said in note.  

However, there is a growing investment opportunity for IDF-NBFCs, estimated at Rs 20,000 crore over the next three years, the rating agency said. This opportunity should support IDF-NBFC’s business growth, it added.

Crisil also said it believed policy makers would continue to play a supportive role, given the potential of IDF-NBFCs in the infrastructure financing domain.

Crisil said it had a stable outlook on the company, adding it believed Infradebt would benefit from a prudent management policy. The agency, however, said the outlook may be revised to negative in case of a significant deterioration in the company’s asset quality.