Above Expectations
IIFCL Apr-Dec net profit already touched FY24 PAT of INR 15.52 bln, says MD
This story was originally published at 14:56 IST on 6 January 2025
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--IIFCL MD: Confident of surpassing FY25 PAT aim of INR 16.50 bln
--IIFCL MD: Look to raise large part of ECB from yen mkt
--IIFCL MD: Apr-Dec net profit already touched FY24 PAT of INR 15.52 bln
--IIFCL MD: Aim to borrow around INR 350 bln in FY26
--IIFCL MD: May raise INR 10 bln via offshore green bonds FY25
--Banking secy: Told IIFCL to lend INR 1 tln in next 3 years
--CONTEXT: Banking secy Nagaraju speaking at IIFCL's summit on infra
By Priyasmita Dutta and Sagar Sen
NEW DELHI – India Infrastructure Finance Co. Ltd.'s net profit for the first three quarters of 2024-25 (Apr-Mar) has already touched the net profit made during the previous fiscal, Managing Director P.R. Jaishankar said. In FY24, the company had posted a 44% increase in net profit to INR 15.52 billion.
Considering the profitability in the Apr-Dec period, Jaishankar said that he was "fairly confident" of surpassing the internal target of INR 16.50 bln net profit for FY25 that the company had set for itself. "We should be able to maintain our CAGR growth rate of 20%," Jaishankar told Informist. Even though the company did not give details of the profit made during Apr-Dec, a back-of-the-envelope calculation shows IIFCL will likely post a net profit of INR 18.62 bln in FY25.
Set up in 2006, IIFCL provides long-term financial assistance to infrastructure projects.
The healthy growth projections are on the back of robust loan disbursements during Apr-Dec. While the lender had set an internal target of disbursing loans worth INR 250 billion in FY25, it has already disbursed loans worth INR 158.42 billion as of December-end. On other hand, the company's loan sanctions in Apr-Dec were INR 411.27 billion, only a little away from the internal target of INR 450 billion for FY25.
At IIFCL'S National Summit on Infrastructure earlier in the day, Department of Financial Services Secretary M. Nagaraju said that he has urged the infrastructure financier to lend a whopping INR 1 trillion in the next three years for "meaningful and world class infrastructure".
IIFCL had sanctioned loans amounting to INR 423 billion in FY24, up 45% from INR 291.71 billion in FY23. Disbursals in FY24 amounted to INR 223.56 billion, up 62% on year.
IIFCL's financial results assume significance in the backdrop of the company considering getting listed in the next one year. Senior company officials have said that the listing would likely happen once the company's profits cross INR 20 billion, which was expected in FY25 itself.
To finance this huge pipeline of lending, Jaishankar said that the company will need adequate funds. In FY26, he said, IIFCL will likely borrow around INR 350 bln, 20% higher than the INR 290 bln borrowing plan for the current fiscal. Of the INR-290-bln borrowing plan, IIFCL has already borrowed INR 250 bln, the managing director said. The remaining will be raised through a mix of domestic and external commercial borrowing, he added. In the next three months, IIFCL will likely borrow up to INR 10 bln through offshore green bonds. "Our GIFT City branch will facilitate this fund raising," Jaishankar said. As of sovereign green bonds, he said the company will consider fund-raising through this instrument when the 'greenium' is more favourable.
The infrastructure financier has been diversifying its borrowing portfolio to lower its cost of funds. Going forward, he said the Japanese yen market may form a large chunk of its external commercial borrowing. "Yen looks the most attractive for us right now, but we will also be looking at various other foreign markets like the European Union," Jaishankar said. End
Edited by Akul Nishant Akhoury
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