State-owned diversified infrastructure lender India Infrastructure Finance Company Ltd (IIFCL) plans to raise about $200 million through external commercial borrowing (ECB) by January 2025, its Managing Director, PR Jaishankar said.
“This will be IIFCL’s first ECB since its inception in 2007. So far, we have only raised funds from multilateral institutions. This marks our debut in private debt markets in the US or Japan,” Jaishankar told businessline.
Jaishankar said IIFCL is also considering green bonds as part of its ECB strategy. “If we secure a good premium, we will tap private debt markets via green bonds, as they offer access to specialised investors,” he added.
Challenging environment
Explaining the rationale for going overseas, Jaishankar noted that international debt markets are softening, while India’s domestic debt environment remains challenging. “Short-term rates are currently costlier than long-term rates in India, suggesting ongoing volatility. The US Treasury is softening, and the Japanese yen market is very attractive. We will choose whichever market offers more cost-effective financing,” he said.
As of March 2024, IIFCL’s standalone loan book stood at ₹51,000 crore, and its consolidated book at ₹60,000 crore. By March 2025, these figures are expected to grow to ₹69,000-₹70,000 crore and ₹75,000 crore, respectively.
Focus Areas
IIFCL plans to increase its exposure to the renewable energy sector from the current 12 per cent of its portfolio to 25 per cent by 2030. On the aviation front, the lender is exploring further funding for Bengaluru International Airport (BIAL) and new opportunities such as Nagpur Airport. Currently, airports account for 20 percent of its overall loan book.
Having financed India’s first green greenfield airport at Jewar, IIFCL is now expanding into emerging sectors like electric vehicles, charging infrastructure and data centres.
IIFCL is keen to lend to the space sector and has requested the government to include space enterprises in the infrastructure harmonized list. “This is under active consideration by the Department of Economic Affairs,” Jaishankar said.
In FY24, IIFCL reported a net profit of ₹1,551 crore. For the first half of FY25, it posted a net profit of ₹811 crore.
Meanwhile, market sources indicate that IIFCL may explore a public listing through an initial public offering (IPO) in the coming months.
Jaishankar highlighted that about 40-45 percent of IIFCL’s overall business has been done in the last four years since the time he assumed charge at the helm of IIFCL. “Going forward, since the base has become very big for us we see our future CAGR to grow at about 25 percent. I would not be surprised if we continue to grow at 60 percent. I would however look at atleast 20-25 percent CAGR in order to grow in a stable manner in long run. I expect base effect to catch up”, he said.