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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.
