India's new infrastructure lender plans debut $610 million bond

India's newly created infrastructure-financing institution is planning a maiden bond issue of 50 billion rupees ($610 million) in the next quarter, according to a senior official at the company.

The institution wants to test the market in terms of pricing with the small issuance, Rajkiran Rai, managing director at the National Bank for Financing Infrastructure and Development, India's new development finance institution, said in an interview.

NaBFID, as the infrastructure-focused lender is called, plans to leverage the government's equity capital to the extent of three or four trillion rupees through issuance of Tier-1 and Tier-2 bonds, among others, according to Rai. "It may take us three years to get there," he said.

India's creaking infrastructure requires nearly $1 trillion in financing by 2025, and is a keystone of Prime Minister Narendra Modi's agenda to accelerate economic growth. In the latest budget, the government proposed raising capital spending by a third to 10 trillion rupees, which will boost NaBFID's agenda, Rai said.