India Infrastructure Finance Company (IIFCL), a government company, has invested ₹325 crore in the non convertible debentures (NCDs) issued by KKR-backed InvIT Virescent Renewable Energy Trust (VRET).
This investment marks the entry of IIFCL in the Infrastructure Debt Market by subscribing to NCD’s issued by an Infrastructure Investment Trust (InvIT). The main objective is to promote Long Term Infrastructure Debt Market in India.
IIFCL had made an e-bid for the issue on February 4. The total monies mopped out through the NCD offering was ₹650 crore, out of which IIFCL has invested ₹325 crore.
Virescent Infrastructure is a renewable energy platform backed by the global investment firm KKR in India. Headquartered in Mumbai, Virescent was established to acquire operating assets and leverage investment opportunities in the renewable energy sector.
Considering country’s infrastructure needs and the development of bond markets, IIFCL has widened its objectives by investing in Infrastructure Project Bonds. This would lead to further improvement in IIFCL’s asset quality, and boost the availability of longer-tenor debt finance for the infrastructure projects, thereby creating an environment that promotes long-term financing for infrastructure sector, especially through bond markets.
P R Jaishankar, Managing Director, IIFCL, said “This issuance marks our first investment in Infrastructure Bonds in an Infrastructure Investment Trusts (InvIT). In our endeavor to provide innovative financing solutions, IIFCL is looking forward to playing a crucial role to develop long term corporate bond market and further support Infrastructure Financing”.
He said a new financial architecture needs to be in place where banks and financial institutions fund an infrastructure project up to the construction phase and subsequent financing is routed through the bond market. IIFCL is accelerating this proposition by providing long-term finance through the bond structure. “We trust that other long term investors like insurance players, pension and retiral funds are encouraged to participate in the long term bond structures”, he said.