The Power Finance Corporation (PFC) and Indian Railway Finance Corporation (IRFC) are likely to be first among public sector undertakings to raise funds overseas, after Finance Minister P. Chidambaram urged PSUs to do so.
The borrowings will be through quasi-sovereign bonds. Confirming the move, a senior Finance Ministry official said the amount was being worked out. It is estimated that these two PSUs and others may bring in $8-10 billion in the current fiscal. It may be noted that such bonds (technically known as sovereign) are issued by Government-owned institutions with Government guarantee and their cost is borne by the institutions. A quasi-sovereign bond can be issued in two ways. There could either be an exclusive issue to foreign investors, such as sovereign wealth funds or pension funds, could be allowed to subscribe to part of the issue.
The Finance Ministry official said that both options could be exercised. The companies will use the funds raised to provide finance for infrastructure projects.
shishir.sinha@thehindu.co.in