Nabfid likely to raise nearly Rs 40,000 crore through bonds in H2FY25

The financial institution is also looking to raise funds from multilateral agencies and is preparing for ratings to facilitate international market fundraises

The National Bank for Financing Infrastructure and Development (NaBFID) is looking to raise about Rs 40,000 crore through market borrowing (10- to 20-year paper) in the second half of FY25.

 

Borrowing from markets was about Rs 9,000 crore in the first half ended September 2024 (H1FY25).

 

Rajkiran Rai G, managing director, told Business Standard the institution was expecting to benefit from a softening yield on market borrowing owing to improvement in liquidity and change in the monetary policy stance by the Reserve Bank of India.

 

Plus, there are prospects of further cuts in policy rates in developed markets.

 

NaBFID is a new financial institution which began lending operations in Fy23.

 

The planned fund raise in H2FY25 is pegged at Rs 55,000 crore. Much of the borrowing will be from the market through long-term bonds (10-20 years’ maturity) to match funding requirements for infrastructure projects, he added.

 

In the first half, the government-owned institution issued non-convertible debentures (NCDs) of Rs 8,190.80 crore. NCDs of Rs 5,000 crore had a tenor of 10 years, carrying a coupon rate of 7.43 per cent and NCDs of Rs 3,910.80 crore had a tenor of 20 years with a coupon rate of 7.36 per cent. It also tapped banks for loans of Rs 2,758 crore in April-September 2024.

   

 

  The institution is looking at raising funds from multilateral agencies and preparing for ratings to mop up money from the international market as well. The global fundraise may happen early next financial year, Rai said.

 

Turning to business in the first half, he said while the sanctions were on track, disbursements were behind the curve, especially in road projects. The renewable energy segment saw a steady rise with proposals for hybrid projects that have a combination of solar, wind and battery storage capacities.  

 

The loan sanctions were Rs 30,855 crore and disbursements Rs 14,510 crore in H1FY25. The outstanding loans rose to Rs 47,576 crore from Rs 35,342 crore in March 2024 and Rs 15,334 crore in September 2023.

 

Capital expenditure is expected to gather pace in the second half, given the planned investment in infrastructure structure. With enhanced credit offtake, the loan books are estimated to be close to Rs 1 trillion by the end of March 2025, Rai said.