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Informist, Friday, Aug. 28, 2026

 

--IIFCL official: H1 sanctions likely to cross FY26 sanctions of INR 580 bln

--IIFCL official: Apr-Jun disbursements up around 17%, profits up over 25%

--IIFCL official: See FY27 sanctions rising 50% from INR 580 bln in FY26

--IIFCL official: Plan to raise $200 mln-$300 mln from overseas mkts soon

--IIFCL official: Plan to raise $300 mln loan from 2 foreign bks, 1 Indian bk

 

By Priyasmita Dutta and Sagar Sen

 

NEW DELHI – India Infrastructure Finance Co. Ltd.'s sanctions have sharply increased after the government removed the limitations under the Scheme for Financing Viable Infrastructure Projects in April, and early estimates show that the company's sanctions during Apr-Sept are likely to be higher than those during the entire 2025-26 (Apr-Mar), a senior company official said Friday. The impact of removing the limitations under the scheme was already visible in the June quarter, and the trend is likely to continue in FY27, the official said. 

 

"After SIFTI limitations were removed, our sanctions pipeline expanded as we could underwrite large projects on our own," the official told Informist "Based on current trends, we will do higher sanctions in H1 (Apr-Sept) than in FY26," the official said. The infrastructure lender had disbursed INR 330 billion in FY26, up 15.7% on year, and sanctioned INR 580 billion, up 12.8% on year.

 

"We saw green shoots of this surge in Q1 (Apr-Jun), but it really took off in Q2 (Jul-Sept)," the official said. While sanctions during Apr-Sept are likely to be higher than the entire FY26, disbursements may not be that high, as they depend on the project cycles of different plans, the official added.

 

In the June quarter, the company's disbursements rose around 17% on year, while profit grew over 25%, the official said. The company had reported a net profit of INR 4.17 billion in the June quarter of FY26, implying that the quarter profit topped INR 5.20 billion in the June quarter of FY27. 

 

The growth in profit is expected to be sustained throughout the year as the strong pipeline of projects points to healthy disbursements, the official said, adding that sanctions during the whole year will likely be up 50% on year. A back-of-the-envelope calculation shows that the sanctions will be around INR 870 billion during the year.

 

This is higher than the company's earlier projection. IIFCL Managing Director Rohit Rishi had said in May that the infrastructure financier is aiming to sanction loans worth INR 750 billion and disburse around INR 390 billion in FY27. In the first two months of the current financial year, the company sanctioned loans worth INR 380 billion notionally, he had said. 

 

IIFCL is a wholly owned government company set up to provide long-term financial assistance to viable infrastructure projects under the Scheme for Financing Viable Infrastructure Projects through a special purpose vehicle, commonly referred to as SIFTI. In September 2013, IIFCL was registered as a non-banking financial company – infrastructure finance company with the Reserve Bank of India and follows the applicable norms of the central bank.

 

Despite being a central bank-registered non-banking financial company, it faced operational restrictions due to dual regulation under the government's Scheme for Financing Viable Infrastructure Projects, which capped its lending limits for large borrowers.

 

To fund its healthy project pipeline, the company plans to raise up to INR 342 billion in FY27, more than double the INR 150 billion raised in FY26. The company will raise the funds through a mix of instruments, including domestic and overseas bond issuance.

 

IIFCL's Board approved a $1.80-billion external commercial borrowing plan in July, of which it has already borrowed $200 million. It plans to raise around $1 billion through long-term external commercial borrowings with tenors of up to 15 years, under the Multilateral Investment Guarantee Agency's Guarantee Facility, in multiple tranches.

 

According to the official, the company is planning to raise another $200 million-$300 million from overseas markets soon. It is also exploring raising $100 million from two foreign banks and $100 million from an Indian bank which has external operations.

 

The RBI measures announced in June, including a concessional dollar-rupee swap facility for eligible external commercial borrowings, are expected to make overseas borrowing more appealing by lowering hedging costs.

 

IIFCL is also scheduled to hold talks with the New Development Bank next week to explore financing opportunities, the official said. The infrastructure financier will also hold talks with the Multilateral Investment Guarantee Agency in September. "Beyond this, we will tap the domestic market as and when we see an opportunity," the official said. 

 

Rishi told Informist in June that IIFCL's borrowing cost is likely to rise by 10-15 basis points in FY27 due to higher bond yields and the company was planning to diversify its funding sources to contain the costs. The non-banking financial company's cost of borrowing marginally declined to 7.03% in FY26 from 7.05% in FY25. Based on Rishi's comments, the financier's cost of borrowing in FY27 is likely to be between 7.13% and 7.18%. 

 

The yield on the 10-year benchmark government bond has risen more than 25 bps to 6.91% since the outbreak of the war between the US and Iran at the end of February.  End

 

US$1 = INR 95.38

 

Edited by Saji George Titus

 

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