EXCLUSIVE
IIFCL plans to raise $500 mln from overseas market by Dec, says deputy MD
This story was originally published at 22:26 IST on 19 September 2025
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BY Priyasmita Dutta and Sagar Sen
NEW DELHI – India Infrastructure Finance Co. Ltd. is planning to raise $500 million from the overseas market by December in order to bring down its cost of funds, the state-owned company's Deputy Managing Director Palash Srivastava said in an interaction Friday. "We have already raised over $150 million so far this year, so overall we are looking at raising $650 million by December," Srivastava said, who presently holds the additional charge of managing director after P.R. Jaishankar stepped down in May.
The overseas fundraising is part of its overall borrowing plan of INR 360 billion for 2025-26 (Apr-Mar). Out of the total borrowing, the company aims to raise INR 80 billion to INR 90 billion from the overseas market and the remaining from the domestic market, he said.
The company is looking at loans from Multilateral Investment Guarantee Agency which will help improve the company's margins, he said. "Over the years, we have brought down our dependence on government-guaranteed borrowing and are focussing on raising funds on our books," the deputy managing director said.
IIFCL had met its borrowing target of INR 300 billion in FY25. It had borrowed INR 42.50 billion, or 14% of the total, from the overseas market and the remaining 86% amounting to INR 257.50 billion was from the domestic market. IIFCL, which is wholly-owned by the government, was set up in 2006 to provide long-term financial assistance to infrastructure projects.
The focus on controlling the cost of funds is to benefit from the benign interest rate scenario, which will lead to a fall in both IIFCL's costs and lending rates, Srivastava said. The Reserve Bank of India has already cut the headline interest rate by 100 basis points so far in 2025 to 5.50%. The US Federal Open Market Committee on Wednesday voted to reduce the federal funds target rate range by 25 bps to 4.00-4.25%, making the US market a lucrative proposition for fundraising, he added.
The company's diversified borrowing plan is also aligned with its huge pipeline of newer products in the infrastructure sector, including tying up with state governments to fund sub-sovereign level infrastructure plans. The company also plans to foray into funding overseas infrastructure projects that are linked to India, following the footsteps of its peer Power Finance Corp. Ltd. which funded a project in Bhutan, the deputy managing director said. IIFCL's cumulative disbursements till June were INR 1.66 trillion, with sanctions at INR 3.53 trillion.
The added focus on diversifying its fundraising also comes in the wake of volatile currency movements, which coupled with repayments, weighed on the company's loan book. In the quarter ended June, IIFCL reported a net profit of INR 4.16 billion, down 25.8% as its margins went down with hefty repayments pulling down its loan book growth. IIFCL's loan book fell to INR 693.32 billion at the end of June from INR 699.04 billion as on Mar. 31.
Notwithstanding its poor financial results, the company's asset quality broadly remained strong, with gross non-performing asset ratio improving marginally to 1.09% at end of June from 1.11% end of March. Its net NPA ratio stayed flat at 0.35% at the end of June. The infrastructure financier's provision coverage ratio, however, dipped to 68.24% end of June from 68.71% at the end of the previous quarter. End
US$1 = INR 88.09
Edited by Ashish Shirke
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