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Informist, Wednesday, Aug. 12, 2026

 

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--NaBFID MD: No plans to raise funds through zero coupon bonds as of now    
--NaBFID MD: Raised $850 mln via overseas borrowing in July    
--NaBFID MD: Plan to raise $3 bln-$4 bln via overseas borrowing by Dec 31    
--NaBFID MD: May raise $500 mln-$1 bln via 10-year dollar-denominated bonds    

 

By J. Navya Sruthi and Sagar Sen

 

MUMBAI – National Bank for Financing Infrastructure and Development has no plans to raise funds through zero-coupon bonds as of now, Managing Director Rajkiran Rai G. told Informist. The country's largest infrastructure financier is currently "enjoying" the perks of the Reserve Bank of India's dollar-rupee forex swap facility for external commercial borrowings, the official said on the sidelines of the Financial Institution Benchmarking and Calibration 2026 seminar here.   

 

The finance ministry had in July given its approval to the institution to raise INR 200 billion by issuing 2 million zero-coupon bonds on or before Mar. 31, 2028, for a period of 10 years. Fundraising through zero-coupon bonds needs permission from the finance ministry, as the Central Board of Direct Taxes has to provide a special tax provision to allow the return on these papers to be classified as capital gains rather than interest income. 

 

Rai said the bank is looking to raise about $3 billion to $4 billion in external commercial borrowing through both bonds and loans put together by the end of December. Talking about the overseas bond issuance, Rai said the pricing of such bonds has risen after the RBI's announcement of this scheme in June. However, it looks reasonable for the institution to raise funds at the current level. 

 

The state-owned entity raised $850 million in July through external commercial borrowing under the RBI's concessional swap window, Rai said. The company set a coupon of around 120 basis points over the secured overnight financing rate on bonds through which it raised $850 million last month.

 

The RBI's swap facility for external commercial borrowings and overseas foreign currency borrowing will remain open up to Jan. 15, 2027, for eligible external commercial borrowings drawdowns made, and overseas foreign currency borrowing flows received up to Dec. 31. 

 

The company plans to raise about $500 million to $1 billion through external commercial borrowing by the end of September. These dollar-denominated bonds will have a tenor of "something around" 10 years, Rai said. "...This FCNR (foreign currency non-resident bank deposits) is the in thing now... we are in ECB that is open till December. So we will plan in such a way that the heat in the system we are looking at slightly longer," Rai said. 

 

The state-owned entity also plans to raise up to another $1 billion within the target of $3 billion to $4 billion through either 10-year or 15-year dollar-denominated bonds, which will be guaranteed by a multilateral agency. However, the official did not give any details or name the multilateral agency.

 

Although the RBI's concessional swap window for external commercial borrowing is for just five years, the company plans to raise funds through around 10-year dollar-denominated bonds. "...basically, there are some guaranteed structures also available internationally. So this (fundraising) is not because the swap window is available, but luckily for us, it is also maturing in this time. So we plan to use that (the swap window)," Rai said.  End

 

US$1 = INR 95.33

 

Edited by Avishek Dutta

 

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