IIFCL aims to raise Rs 2,000-cr via maiden green bonds in next 6 months

It could be a mix of both domestic and foreign issuances, depending on the cost of funds. The state-owned infrastructure financier is exploring options of foreign currencies denominated green bonds, focusing mainly on Yen denominated bonds

New Delhi: India Infrastructure Finance Company Ltd (IIFCL) is planning to raise Rs2,000 crore through its maiden green bonds in the next six months to fund sustainable projects. It could be a mix of both domestic and foreign issuances, depending on the cost of funds, said IIFCL managing director P R Jaishankar.

The state-owned infrastructure financier said it is exploring options of yen-denominated green bonds, he said, adding, it may happen in this quarter or the first quarter of the next financial year. “Sustainable green bonds are one of our major lookouts and yen is one major currency that we are considering, and we are also looking at other currencies, but it will all depend on how cost-effective it is, including the hedging cost and the overall cost of borrowings,” he said. “If the domestic environment gives us a better option then we will go with domestic. If yen gives a better return, we will go with yen.” he said.

This is part of the company's aim to diversify its borrowing portfolio and enhance the share of the green projects in the portfolio mix. Last week, State Bank of India (SBI) raised $250 million (about Rs2,000 crore) through the issuance of green bonds maturing in 2028 via private placement. From the performance perspective, he said the company has been consistent both on topline and bottomline parameters. He expects the FY24 profit to cross Rs1,500 crore.

IIFCL reported a two-fold jump in standalone net profit at Rs1,076 crore in FY23 aided by an increase in lending and reduction of bad loans. The infra lender posted record sanctions and disbursements at Rs29,171 crore and Rs13,826 crore, respectively. Since its inception, the company has given Rs2.5 lakh crore loans to 750 infra projects. As of December 2023, the company has earned a profit of Rs1,189 crore with loan sanctions of Rs30,315 crore, exceeding the figures of last fiscal in just three quarters.

Given the demand so far, he said, the loan sanction amount would cross Rs40,000 crore by March 2024. He emphasized on the role that IIFCL is set to play to fund the next phase of infrastructure growth story and the slew of reforms needed to take the infrastructure sector to the next level. Gross non-performing assets (NPAs) and net NPA ratio has been consistently falling and stood at 3.77 per cent and 0.85 per cent, respectively, as on September 30, 2023.