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Informist, Thursday, Dec. 11, 2025

 

--Source: NaBFID unlikely to meet INR 500-bln borrow aim for FY26

--Source: Internal accruals helping NaBFID lower market, bank borrowing FY26

--Source:Cheaper for NaBFID to borrow through bank loans than bonds recently

--Source: NaBFID may tap overseas bond mkt Jan-Mar, may keep issuance small

--Source: Cheaper for NaBFID to raise money in India than overseas mkt now

By Cassandra Carvalho, J. Navya Sruthi, and Aaryan Khanna 

 

MUMBAI – The National Bank for Financing Infrastructure and Development is likely to undershoot its borrowing target of INR 500 billion for 2025-26 (Apr-Mar) due to higher internal accruals, an official said. The specialised development financial institution's foray into the offshore borrowing market may also be curtailed due to the elevated cost of borrowing overseas at the current juncture, the official said.

 

"The rate cuts have brought down the rates of interest on deposits," the official told Informist on the condition of anonymity. "So, we decided to not roll over some of the fixed deposits and instead deploy them into lending." The policy repo rate has been cut by 100 basis points to 5.25% so far this fiscal year started April.

 

In an interaction with Informist in August, Deputy Managing Director Monika Kalia had said NaBFID might raise INR 500 billion through a mix of term loans, domestic debt market borrowing and external commercial borrowing to fund INR 600 billion of disbursements in FY26. In Apr-Sept, the institution disbursed loans of INR 164.39 billion.

 

NaBFID is the nodal agency for infrastructure financing in the country and the youngest development finance institution in India, set up in 2021. It aims to push up disbursement in the March quarter and may raise another INR 150 billion through bonds and term loans then, depending on the cheaper mode, the official said. Borrowing from banks has been more competitive than tapping the bond market in recent months and may continue to be the favoured route for NaBFID if the situation continues, the official said.

 

So far, it has raised around INR 150 billion from the bond market and around INR 50 billion in term loans, the official said. Data compiled by Informist showed NaBFID has tapped the market for INR 185 billion of bonds in FY26, though it raised only INR 119.29 billion. The borrowing mix will remain concentrated towards long-term issuances to match its liabilities, with a weighted average of around 13 years, the official said.

 

NaBFID had also planned to tap the overseas market for $1 billion through external commercial borrowing earlier this year. While the lender has not come up with any offshore issuances so far, the official said the planned borrowing would fructify in Jan-Mar. However, the institution may not raise a large amount as it is cheaper for it to raise money in the domestic market amid a rise in yields in other major markets, in addition to having marquee investors lining up for their rupee-denominated supply.

 

"We will definitely issue some amount to create the process and to diversify our sources of funding," the official said. "But if the disbursements climb sharply or the conditions change and borrowing becomes cheaper via ECBs (external commercial borrowing), then we may go in for a larger amount."

 

In addition to its lending aims, the organisation is also working to facilitate greater offshore investment in India's infrastructure boom through syndicated loans under partial credit enhancement schemes. The infra loan provider is in talks with several multinational companies to set up an alternative investment fund-type mechanism in GIFT City in order to attract foreign capital to India's infrastructure projects, the official said.  End

 

US$1 = INR 90.37

 

Edited by Avishek Dutta

 

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