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NaBFID plans $500 million equity fund to boost infrastructure financing

NaBFID's entry into equity marks an expansion of its toolkit beyond traditional debt and a bid to appeal to a broader swath of investors as the country's infrastructure needs accelerate

HSBC’s GIFT City unit will extend the loan to NaBFID | Image: Bloomberg

Bloomberg

2 min read Last Updated : Mar 05 2026 | 4:31 PM IST

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By Saikat Das

India’s National Bank for Financing Infrastructure and Development (NaBFID) is planning to raise about $500 million to create its first equity-focused fund, according to people familiar with the matter, bolstering its capacity to support infrastructure projects in the world’s fastest-growing major economy.

The state-owned lender plans to set up an equity-focused alternative investment fund at GIFT City, India’s international financial hub, and is in discussions with the hub’s regulator, the International Financial Services Centres Authority (IFSCA), the people said, asking not to be identified as the information is private.

The agency, created five years ago to close India’s infrastructure financing gap, typically funds the sector by selling rupee bonds and loans and funneling proceeds to long-term projects that struggle to obtain bank credit. NaBFID’s entry into equity marks an expansion of its toolkit beyond traditional debt and a bid to appeal to a broader swath of investors as the country’s infrastructure needs accelerate.

India’s rapid population growth will require an estimated $4.5 trillion investment in infrastructure by 2030, according to data from government think tank Niti Aayog, and NaBFID has quickly scaled up its lending. Total assets surged 44% year over year to 1.04 trillion rupees ($11.4 billion) as of Dec. 31, 2025, according to its website.

Still, the bank has sought to expand its funding beyond domestic debt markets, where its recently been squeezed by falling interest rates. NaBFID’s loans are repriced every six or 12 months, while most of its own borrowing costs are fixed, leading the bank to rely more on derivatives. Last month, NaBFID secured about $125 million from HSBC Holdings Plc, marking the lender’s first ever foreign currency borrowing.

Once the funding vehicle is set up, the money will be raised in tranches over the next six to nine months, said the people. Discussions are ongoing, and terms are not yet finalized, they added. IFSCA and NaBFID did not immediately reply to Bloomberg’s emails seeking comments.